How Solar And Wind Are Causing Electricity Prices To Skyrocket

Russia, the largest oil producer, wants the US to rely on wind and solar for energy.The following article was written by a leading environmental activist, who’s also running for governor of California, not some fossil-fuel advocate.

Guest essay by Michael Schellenberger

Over the last year, the media have published story after story after story about the declining price of solar panels and wind turbines.

People who read these stories are understandably left with the impression that the more solar and wind energy we produce, the lower electricity prices will become.

And yet that’s not what’s happening. In fact, it’s the opposite.

Between 2009 and 2017, the price of solar panels per watt declined by 75 percent while the price of wind turbines per watt declined by 50 percent.

And yet — during the same period — the price of electricity in places that deployed significant quantities of renewables increased dramatically.

Electricity prices increased by:

What gives? If solar panels and wind turbines became so much cheaper, why did the price of electricity rise instead of decline?

One hypothesis might be that while electricity from solar and wind became cheaper, other energy sources like coal, nuclear, and natural gas became more expensive, eliminating any savings, and raising the overall price of electricity.

But, again, that’s not what happened.

The price of natural gas declined by 72 percent in the U.S. between 2009 and 2016 due to the fracking revolution. In Europe, natural gas prices dropped by a little less than half over the same period.

The price of nuclear and coal in those place during the same period was mostly flat.

Another hypothesis might be that the closure of nuclear plants resulted in higher energy prices.

Evidence for this hypothesis comes from the fact that nuclear energy leaders Illinois, France, Sweden and South Korea enjoy some of the cheapest electricity in the world.

Since 2010, California closed one nuclear plant (2,140 MW installed capacity) while Germany closed 5 nuclear plants and 4 other reactors at currently-operating plants (10,980 MW in total).

Electricity in Illinois is 42 percent cheaper than electricity in California while electricity in France is 45 percent cheaper than electricity in Germany.

But this hypothesis is undermined by the fact that the price of the main replacement fuels, natural gas, and coal, remained low, despite increased demand for those two fuels in California and Germany.

That leaves us with solar and wind as the key suspects behind higher electricity prices. But why would cheaper solar panels and wind turbines make electricity more expensive?

The main reason appears to have been predicted by a young German economist in 2013.

In a paper in Energy Policy, Leon Hirth estimated that the economic value of wind and solar would decline significantly as they become a larger part of electricity supply.

The reason? Their fundamentally unreliable nature. Both solar and wind produce too much energy when societies don’t need it, and not enough when they do.

Solar and wind thus require that natural gas plants, hydro-electric dams, batteries or some other form of reliable power be ready at a moment’s notice to start churning out electricity when the wind stops blowing and the sun stops shining.

And unreliability requires solar- and/or wind-heavy places like Germany, California, and Denmark to pay neighboring nations or states to take their solar and wind energy when they are producing too much of it.

Hirth predicted that the economic value of wind on the European grid would decline 40 percent once it becomes 30 percent of electricity while the value of solar would drop by 50 percent when it got to just 15 percent.

In 2017, the share of electricity coming from wind and solar was 53 percent in Denmark, 26 percent in Germany, and 23 percent in California. Denmark and Germany have the first and second most expensive electricity in Europe.

By reporting on the declining costs of solar panels and wind turbines but not on how they increase electricity prices, journalists are — intentionally or unintentionally — misleading policymakers and the public about those two technologies.

The Los Angeles Times last year reported that California’s electricity prices were rising, but failed to connect the price rise to renewables, provoking a sharp rebuttal from UC Berkeley economist James Bushnell.

“The story of how California’s electric system got to its current state is a long and gory one,” Bushnell wrote, but “the dominant policy driver in the electricity sector has unquestionably been a focus on developing renewable sources of electricity generation.”

Part of the problem is that many reporters don’t understand electricity. They think of electricity as a commodity when it is, in fact, a service — like eating at a restaurant.

The price we pay for the luxury of eating out isn’t just the cost of the ingredients most of which, like solar panels and wind turbines, have declined for decades.

Rather, the price of services like eating out and electricity reflect the cost not only of a few ingredients but also their preparation and delivery.

This is a problem of bias, not just energy illiteracy. Normally skeptical journalists routinely give renewables a pass. The reason isn’t that they don’t know how to report critically on energy — they do regularly when it comes to non-renewable energy sources — but rather because they don’t want to.

That could — and should — change. Reporters have an obligation to report accurately and fairly on all issues they cover, especially ones as important as energy and the environment.

A good start would be for them to investigate why, if solar and wind are so cheap, they are making electricity so expensive.


Michael Shellenberger is a Time Magazine “Hero of the Environment,” Green Book Award Winner, and President of Environmental Progress, a research and policy organization.

Read more at Forbes Blogs

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173 thoughts on “How Solar And Wind Are Causing Electricity Prices To Skyrocket

  1. Add to that the fact that we are shutting down perfectly usable, mostly paid off, ling lived generation capacity, only to replace it with short lived junk that will not be paid off for 30 years, far after they become worn out.

      • That’s the problem with Utopia . It’s bad for those it says to protect like any socialist idea.

      • Sue the pants off them. There probably should be some sort of “class action” “environmentalists knew” case taken against the alarmist brigade. That case would point out the full scope of the deliberate wilfull ignorance that has been on display for decades.

      • “…installation of a no privacy Smart Meter”
        How does a Smart Meter invade your privacy? You can opt-out if you want.

      • They know exactly what electronic device you are using and at what moment. And in spain you can’t opt-out . If you know how please tell me.

      • Sorry, I was wrong. CenterPoint will be happy to reinstall a dumb meter for $201 up front and $32.80 per month forever thereafter.

  2. …The main reason appears to have been predicted by a young German economist in 2013….
    That’s funny.
    I would imagine that this complete mess would have been predicted by the Electrical Engineers themselves when the idea was first mooted – but then they were probably white male techies, and therefore no one need listen to them.
    It was also predicted by Dr Denny, in her famous PhD thesis on wind power in 2007 : https://erc.ucd.ie/files/theses/Eleanor%20Denny%20-%20A%20Cost-Benefit%20Analysis%20of%20Wind%20Power.pdf
    But the environmentalists didn’t read that either. She was probably a denier.
    It looks as if they will inly start reading things that predict a problem once the problem has been made real, apparent, and they are fairly sure they won’t get ostracised for reading them. Much like politicians. Not a good way to run anything….

    • Long before those dates. Any engineer responsible for long range planning (and costs) of ANY electric utility in the US could have and should have been consulted. I started work for Portland General Electric in 1974 and I was immediately aware that any of the engineers in power supply there were (and are) well aware of the quality of power issues (wind and solar are LOW quality power producers simply because they are NOT always available when the demand requires). That being a fact, it is necessary to provide ‘other’ generation capacity virtually at all times. Since the biggest cost to a utility is the capital investment (NOT FUEL!) the capital cost always drives the electric rate. It has never been a secret but sometimes folks have to actually ask the right questions and be prepared to accept answers that don’t fit their preconceived notions of reality.

    • My experience with greenies is that they are so indoctrinated that nothing can possibly go wrong with going green. The world will be 1 big green lollypop. They live in a fantasy green delusion. And no one can reason with them.

  3. An excellent article! Now we need to be sure Politicians of all stripes in the UK and other countries where this ludicrous rush for “renewables” is costing everybody a fortune! Nicola Sturgeon in Scotland would do well to read it, for sure!

    • Phil
      Nicola Sturgeon can’t read anything but her own propaganda!
      My desire is to retire back to Scotland in five years or so, from the SE of England.
      I’m not doing it if the SNP are still in residence, I’ll just have to console myself with Cumbria, as close to the border as I can get, but still in England.

    • Nicola Sturgeon is a Scots Nationalist and a Socialist, a National Socialist if you like.Yup, that’s about right.

      • Robertvd
        Correction…….that’s the one that want’s…………..The mad protégé of the mad Salmond has been left carrying the can for his failure, and she’s to stupid to recognise it.

  4. An excellent article! Now we need to be sure politicians of all stripes, in the UK and other countries where this ludicrous rush for “renewables” is costing everybody a fortune, read it and learn from it! Nicola Sturgeon in Scotland would do well to read it, for sure!

  5. The main reason appears to have been predicted by a young German economist in 2013.
    Expletive, expletive, expletive. Are expletive serious? Predicted by a young German economist in 2013? Are you expletive expletive serious?
    How about EXPLAINED by every last person with any background in power generation AT ALL since before the very first idiotic solar and wind farms were even proposed, let alone built. Who with any understanding of the basics of power grids DIDN’T see this coming? Yeah some of them didn’t have the cahonies to say so because it wasn’t politically correct, but the notion that this was first thought of by some fresh faced economist is absurd.

    • Exactly. The economics only works for the Lefties if the Quality of Service (QOS) targets are very significantly relaxed, but it’s so so obvious and so easy to calculate that such ignorance at such high levels of governments and advisory institutions belies belief. If ideology corrupts, absolute ideology corrupts absolutely.

    • I do not see where the author claims that Leon Hirth was the first to state the issue. A link is given to a published paper that explains what is happening. The word “predicted” is used (and I haven’t read the Hirth paper) here but that does not imply “a first” claim.
      It is good to have a reference to an actual paper, rather than to what Leo S. claims as “have been shouting for years.
      I’ve been reading posts here at WUWT since fall of 2008 (migrated from POTS to DSL), and picking up other blogs since, and now this issue is something I seem to have known forever.
      I am sure that EEs recognized this very soon, but one doesn’t have to be an EE to see. Rather, I think some don’t see it because they don’t want to.
      Someone could do us a favor and search for the first 10 or 20 papers that made predictions of this sort.
      That would be a good read. But I’m not the one to do it.
      I’ll just say thanks to A.W. and his blog.

      • In the late 1970’s this was all explained in excruciating detail to Governor Jerry Brownout and his PUC and Energy Commission. They chose ideology.

      • I think EEs have always understood that intermittent asynchronous generating resources were not as good for the system as conventional generation, But when the amounts were small and the system was robust it was not a big deal. In theory (and practice) their use in small amounts instead of conventional generators would cause either a slight decrease in reliability or increase in cost (or both). The small burdens from small amounts, many would judge as worthwhile due to what we might learn and how we might support future growth of beneficial technologies. I think most EEs expected that such technology would only be expanded when it could provide enough benefits to pay for the extra costs it incurred. When it became apparent that mandates and subsidies were supporting uneconomic renewab

      • This is when I like to mention that California had windmills in the early ’80s, you can see them in the closing shot of the movie “Less than Zero” w. Robert Downey Jr. and James Spader. Not a good movie, but I like to notice backrounds, and in the shot they are on a highway, camera pulls back to show what was likely a Jimmy Carter-subsidized wind farm. How’d those work out? I’m guessing it worked out just like Dave Fair (or somebody he knows) explained it to Jerry Brown way back then.

        • Throw enough money at it, however, and any electric generation system will work. The problem is that there is little money left over for other things. It’s like everything else in life.

      • Paul,
        Wind farms with smaller turbines were built during Jerry Brown’s first two terms as governor in the late 1970s and early ’80s. As you suspected, they didn’t work out so well.
        The bigger, more advanced Chinese turbines of today are a little more powerful but far deadlier to birds and bats. And of course more unsightly and still soak up huge subsidies, squandering money better left unspent.

  6. “In 2017, the share of electricity coming from wind and solar was 53 percent in Denmark, 26 percent in Germany, and 23 percent in California. Denmark and Germany have the first and second most expensive electricity in Europe.”
    Great article, but I question the amount of power from wind and sun in Germany. More likely this is th e sum of “renewables”, which include hydro, and, more importantly, “biofuel”. Sun and wind are probably down to ca. 15%.

    • One always has to be cautious when talking about “renewables.” Those sources are that much of the energy supply in those places – by nameplate generating capacity.
      The nameplate on a coal plant, natural gas plant, nuclear plant (and hydro, assuming no severe drought) tells you what it can generate; just flip the switch. Wind and solar – not. In fact, they only generate their nameplate capacity under very rare conditions. The “flip the switch” sources have to make up the deficit when the “renewable” sources can’t meet demand – and you still have to pay for the upkeep and operators of those reliable sources even when they are NOT running – which raises prices.
      I wish the author of the OP well – although his bid for Governor is certainly not going anywhere. Not in California.

      • Writing –
        Very astute observation. If an area starts with a coal fired plant for electricity and adds solar and wind, then they have just added new installation and maintenance costs to their area. Those costs have to be paid.

      • Otter Tail Power Company in Minnesota is asking for a rate hike in South Dakota (they serve both states) primarily to recoup the costs involved in their wind farm investment.

      • I noticed that Germany’s solar and wind totals 22.4% for electricity generation and biomass is a further 7%. and burning of waste provides 0.9%. Can anybody confirm that the burning of the biomass and waste is completely pollution free in that all the particulate matter is caught in the scrubbers? So not counting nuclear (11.7%) and hydro(3.1%) ; renewables total up to 30.3%. I would think that geothermal will add to this total in the future. However the challenge will be to hit the 50% renewable goal not counting nuclear and hydro, without sending the price/cost of electricity through the roof. The German authorities definitely have that goal in mind. I just dont see how that is possible considering the massive capital cost of electrical lines for the grid to accomodate this new solar and wind generation.

    • I could see getting some electricity from wind in Denmark, intermittent though it would be. But sun?? The country doesn’t get all that much sun even in summer, and what there is comes in at a lowish angle. I can’t imagine the solar segment of production giving out more than five or ten percent of capacity.

  7. Yes, excellent cold hard look at the thing.
    This is connected to the idiotic persistence in using Levelised Costs as a standard of comparison between conventional and wind and solar. This amounts to pretending that intermittency has no cost, and that all electricity is equally valuable and usable no matter when its produced and no matter what the demand may be at the time. A huge peak produced when there is no demand has the same value as when there is no demand. Suddenly dropping off supply when demand is high has no cost either.
    Its idiotic, it was refuted years ago by peer reviewed papers, but the faithful will still not admit it because it conflicts with their fantasy of a world running on wind and solar
    You find this being argued among other places on Ars Technica which on climate has turned into an echo chamber of fanatical global warming doom mongers, and equally fanatical religious believers in renewables.
    Good to see a sensible business approach to the whole scam.

    • Nothing wrong with levelised costs, provided they ARE levelised
      Renebasles are not. Their external costs – backup, grid connection, storage, environmental impact, especially where their raw materials are sourced – none of these are added in to provide a holistic ‘levelised cost’. Neither is cost of capital which may be subject to low interest ‘green loans’.
      The net result is falling prices from ‘renewables’ and rising cost to the consumer.

    • As soon as you run out of other people’s money to maintain this system it will fall apart in an eyeblink. Most people can buy a Ferrari. It’s the maintenance which makes it expensive to drive.

      • Whoever has the lowest energy prices wins in the world market place. The germans and we here in Ontario are beginning to realize that we are losers because of going green

  8. I am surprised the author didn’t quote the experiences coming out of Australia. The states with the highest percentage of so-called renewable energy have the highest electricity prices. They also have to import electricity from neighbor states when the sun’s not shining and the wind is not blowing and that puts pressure on the grid in those states too. South Australia was the worst offender. It has blown up its last coal fired power station. When the demand one time last year was so great on the inter-connector with Victoria a breakdown occurred. Then the whole state was plunged into darkness for at least a day in some places.The Australian press reports South Australia has the highest electricity prices in the world.
    I hate the word “renewable” when it is associated with energy. Energy cant be created or destroyed let alone “renewed”. What it is really is intermittent energy.

  9. “Normally skeptical journalists routinely give renewables a pass. ”
    Duhhh…, they were programmed to do that by their “liberal” educations at J-school. And they are paid to continue that by their Progressive leaning publishers.
    What Mr.Michael Shellenberger does not do is carry out this energy cost analysis to its logical conclusion from current trends in California (or Germany). The endgame is catastrophic and essentially leads to situations like South Australia where electricity grid brown-outs and black-outs occur with increasing frequency during summer nights when the sun isn’t shining and the wind is not blowing. Industry flees, consumers suffer. Yet climate virtue prevents an honest analysis of the cause.
    The conclusion is the picture is not pretty if the renewables boat doesn’t do a 180… and soon.
    Of course, you’ve got renewable investors like billionaire Tom Steyer, heavily long invested in renewables derivative positions, funding the climate charades and funding the political (Democrats) support for more wind and solar, and funding non-attributable, dark attack machines on Republicans and climate d3niers.

  10. “Normally skeptical journalists routinely give renewables a pass. ”
    Duhhh…, they were programmed to do that by their “liberal” educations at J-school. And they are paid to continue that by their Progressive leaning publishers.
    What Mr.Michael Shellenberger does not do is carry out this energy cost analysis to its logical conclusion from current trends in California (or Germany). The endgame is catastrophic and essentially leads to situations like South Australia where electricity grid brown-outs and black-outs occur with increasing frequency during summer nights when the sun isn’t shining and the wind is not blowing. Industry flees, consumers suffer. Yet climate virtue prevents an honest analysis of the cause.
    The conclusion is the picture is not pretty if the renewables boat doesn’t do a 180… and soon.
    Of course, you’ve got renewable investors like billionaire Tom Steyer, heavily long invested in renewables derivative positions, funding the climate charades and funding the political (Democrats) support for more wind and solar, and funding non-attributable, dark attack machines on Republicans and climate d3niers.

  11. A good start would be for them to investigate why, if solar and wind are so cheap, they are making electricity so expensive.
    Sure Mr. Schellenberger, let’s blame those reporters. Not the green activists who made the lives of anyone who spoke out against wind and solar a living h*ll including getting them fired from their jobs. Let’s just ignore all that, huh?
    But since you want it investigated, its this simple.
    There’s base load generation like coal and nuclear that is good at steady state production, and there is load following generation that can nearly instantly make up for variability in demand and supply. You need both or the grid will fail.
    Base load generation costs X
    Load following generation costs 10X – 30X or even more.
    For every watt of power you provision from highly variable sources like wind and solar, you have to remove one watt of power at a cost of X and provision a watt of power in load following that costs 10X – 30X and you have to pay for it even when you’re not using it because it costs nearly as much JUST to have it on standby and if you DON’T have it the grid will fail.
    This was known before the very first wind mills and solar panels ever went into production. Call for an investigation into THAT Mr. Schellenberger. There’s no mystery to why wind and solar push prices up, even if they were FREE they would increase costs.

    • I think you should be a little easier on Mike Shellenberger (name is misspelled in the article). While I don’t share his concern about the effects of climate change, he has been adamant in his support for nuclear energy as a low carbon alternative to fossil fuels. He understands the importance of reliable electricity to modern society, and as a result has been regularly attacked by other environmentalists.

    • But the reporters are to blame. Most of them are outright propagandists for renewables and propaganda does work, especially when it’s so broadly disseminated among a naive population. Also, the propaganda has built massive support for subsidies which has resulted in even intelligent investors like Warren Buffett deciding it makes sense to put money in wind, for now anyway.
      Honest reporting would bring the renewables charade to a quick end, but don’t hold your breath for honest reporting any time in the near future.
      And, in my opinion, honest reporting would also up President Trump’s approval rating to north of 60%, but that’s a separate issue. Still, when a documented 90%-plus of all news stories on him are negative it’s amazing he’s anywhere near 50%. Propaganda works. There’s a reason autocrats always deploy it, but first commandeer all the news organs in their domain.
      And, as long as this is turning into a screed, the combination of the internet and WUWT (and other similar, though less-read, sites) have given the news propagandists a run for their money. After all, the author is running for California’s governorship. He wouldn’t have a chance of getting this story out without alternative media. The current crop of national reporters would belittle him mercilessly.

      • But the reporters are to blame.
        The reporters were silent in part due to their own incompetence and political leaning. But mostly due to political pressure from greens. MSM doesn’t allow COMMENTS in their articles from skeptics let alone articles from their reporters. That’s a management decision, not a reporter decision. Then this green shows up with some backward looking analysis and says, hey, this economist may have figured this out. BSH*T! When THIS (or any) green steps up and says, yes, this was known, and we buried it through intense lobbying and pressure, ruined people’s careers, yes even lied, and we shouldn’t have, then I will be impressed. This particular green is making it out like it was some really complicated thing that was hard to figure out and the press is to blame for them not doing their jobs. BSH*T. The greens are to blame for silencing the reporters, not they turn around and blame them? BSH*T, BSH*T, BSH*t!

      • We are subject to the “if it bleeds, it leads” mentality. Doom and gloom sell. Repeated doom and gloom sell more. No conspiracy, just the largest load of incompetence ever found.

    • “Base load generation costs X
      Load following generation costs 10X – 30X or even more.
      For every watt of power you provision from highly variable sources like wind and solar, you have to remove one watt of power at a cost of X and provision a watt of power in load following that costs 10X – 30X and you have to pay for it even when you’re not using it because it costs nearly as much JUST to have it on standby and if you DON’T have it the grid will fail.”
      Wasn’t that true in 1970?
      Sounds like the issue is really one of markets.
      Wind tends to attack baseload, but, solar attacks peak loads.
      If there are any gaps, you price the gap.
      That’s where Peakers need to compete in real-time pricing.

  12. WWUT’s own Willis Eschenbach was all over this more than two years ago
    Willis analyzed the relationship between the retail price of electricity and national amounts of “renewable” generating capacity.
    “Obama May Finally Succeed! by Willis Eschenbach on August 3, 2015
    https://wattsupwiththat.com/2015/08/03/obama-may-finally-succeed/
    His chart shows that the retail price of electricity should be expected to increase by 0.0002 U.S.$ for each additional KW of installed renewable generating capacity. R^2 = 0.84, p-value = 1.5E-8.
    He says: “That is a most interesting result. Per capita installed renewable capacity by itself explains 84% of the variation in electricity costs. …
    Today, President Obama said that he wanted 28% of America’s electricity to come from renewable energy by 2030. …
    Currently, we get about 4% of our electricity from wind and solar. He wants to jack it to 28%, meaning we need seven times the installed capacity. … this means that the average price of electricity in the US will perforce go up to no less than 43 cents per kilowatt-hour. …
    Since the current average US price of electricity is about 12 cents per kilowatt-hour … that means the true price of electricity is likely to almost quadruple in the next 15 years.”

  13. The reason is obvious. We have a conventional electricity system which provides all our electricity needs. Then we build a second system which only works when the wind blows. Then we build a third system which only works when the sun shines. We now have three systems to pay for when we only used to pay for one system (which we still need as it is the only one which works all the time). We are now paying for two unnecessary systems as well as the one that works all the time.

    • Philip
      there is a fourth: some storage capability. Usually pumped hydro but now expanding to various battery technologies. In reality Denmark pays Norway to store its over production then buys it back later.

      • I’ve always admired the Norwegian approach to free gifts! First they make sure that THEY reap the long-term benefits from their oil bonanza and now they charge to store your surplus energy AND charge you to have it back when you need it.
        Talk about having it coming and going …

      • Newminster
        You forgot to mention that we also retire early, and then go to live in places like the Mediterranean, or Florida (my choice) where taxes are lower and the sun always shines to remedy the main objections to living in Norway.

  14. The same issue occurs with subsidies, if you want the same ‘subsidies’ in e.g. various infrastructure between fossil fuels (e.g. building the plants, railways, ports, royalties etc) and renewables, they have to compare in output and length of life to get your money back-which they don’t.
    So if you give a 100 million to a coal power station and 100 million to a wind turbine project it’s not making things ‘even’, because the wind turbine doesn’t provide the same output.

  15. All true – I wrote similar conclusions in 2005.
    E.On Netz, in their report “Wind Power 2005” describes the problems.
    http://www.wind-watch.org/documents/wp-content/uploads/eonwindreport2005.pdf
    One of the greatest disadvantages of wind power is the need for almost 100% conventional backup. E.On Netz (the largest wind power generator in the world) says the “substitution capacity” in Germany was 8% in 2003, and will drop to 4% by 2020. See Figure 7 in the E.On report.
    “In concrete terms, this means that in 2020,
    with a forecast wind power capacity of over
    48,000MW (Source: dena grid study), 2,000MW of
    traditional power production can be replaced by
    these wind farms.”
    Another big problem with wind power is that power varies as the cube of the wind speed – this causes sharp peaks and valleys in the power output from wind farms, so extreme that it can cause the entire grid to crash – try that in winter – remember the 1998 ice storm? People died…
    A near-miss occurred in German during Christmas week of 2004 – see Fig. 6 in the E.on report.
    “The feed-in capacity can change frequently
    within a few hours. This is shown in FIGURE 6,
    which reproduces the course of wind power feedin
    during the Christmas week from 20 to 26
    December 2004.
    Whilst wind power feed-in at 9.15am on
    Christmas Eve reached its maximum for the year
    at 6,024MW, it fell to below 2,000MW within only
    10 hours, a difference of over 4,000MW. This corresponds
    to the capacity of 8 x 500MW coal fired
    power station blocks. On Boxing Day, wind power
    feed-in in the E.ON grid fell to below 40MW.
    Handling such significant differences in feed-in
    levels poses a major challenge to grid operators.”

  16. I share the feelings of many here. Not excrement, Sherlock! You really need your young economist in 2013 only after a large scale human experiment before you see something that was very obvious from the start.
    Still it is good that some facts dawn to some people, and they have the guts to put them to print. It is, of course, whole lot a different story if this has any effect on wind power plant salespeople, politicians wanting to pose green, or their voters. But, if this kind of stuff were published in The Daily Gosh, then maybe it will also end up in The Guardian, thus changing the minds of the politically hypercorrect and intellectually adorable.

    • Beyond the issues being discussed, this “large scale human experiment” has had devastating effects on rural residents. There were no studies done by the wind industry to prove that nearby residents would not be harmed by audible or inaudible noise.

  17. Electricity is charged for on the basis of kilowatt hour. Charging on the basis of kilowatts with just a small additional charge for the variable energy component would mean everyone would be paying their fair share. Most peoples’ bills would be quite similar, even those of the domestic solar brigade who can’t bring themselves to sever the link to the grid but expect others to pay for their security of supply.

    • I’m sorry, but I don’t think you know what you’re talking about 4 Eyes. A Kilowatt hour is just what it says it is, 1000 Watts of power for 1 hour. But it could also be 100 Watts for 10 hours, or 6000 Watts for 10 minutes.
      The Kilowatt Hour is the ‘volume’ measure of how much electricity you use, comparable to ‘gallons’ in fluids, or ‘ megabytes’ in data. Trying to buy electricity in Kilowatts instead of Kilowatt Hours would be like trying to buy gasoline by the width of the pipe it flows through. It’s almost meaningless.
      ~¿~

      • It’s not meaningless, and it is actually done.
        paying for kW means you have to pay for grid and capital cost of the plants and men servicing them, whether you ask for power or not, just because you may use them at will.
        paying for kWh makes sense only insofar as you use fuel and a few maintenance fees proportionate to energy delivered, which is a small part of the cost, actually.

      • All right, there are some services where you pay a flat rate just to be connected, and regardless of whether and how much you use it, like cable TV or old style home phone service.
        But would that really make since for electicity? Maybe in the future, when the price per Kilowatt is so low that it really is ‘too cheap to meter’ then it would make since to pay a flat rate for your hook up, say based on how many Amps it is rated for. (Most home services in the US are 100 or 200 Amp services, while industrial one’s can be in the 10’s of thousands)
        But it really doesn’t make much sense today, and it certainly wouldn’t be ‘fair’. Why should I have to pay as much for electricity as a family of 5 who live in a house 4 times the size of mine? What would be the point of ‘saving electricity’ if you payed as much regardless of how much you used?
        You know the power companies are going to be making the same profit regardless, so each of those Kilowatts still has to be payed for. All this plan does it makes the people who use the least help pay for those who use the most, and since there’s no incentives to use less EVERYONE is going to use as much as they can to get there money’s worth.
        It’s Liberal ‘equality’ at it’s most absurd. And as one of those who will end up paying for the rich’s wastefulness, I’ll be saying No Thanks.
        ~¿~

    • Depends on the country and company, I guess.
      In fact, I pay electricity on the basis of
      * a fixed part, whether I use electricity or not. Supposed to pay for fixed cost (plant, grid, servicing, etc.), on the basis of max kW contracted. The more kW, the higher .
      * a variable part on the basis of kWh used , itself with two component (basically : daytime= high price, night time = low price. )
      * last but not least, taxes, and taxes, and more tax, and taxes again. Part of the tax goes to “renewable”, but, don’t worry, not all of it, the taxman has other charities to finance.
      I am not sure of the respective share, but it could be 1/3 fixed kW + 2/3 variable kWh, and half taxes in both

      • That’s the biggest problem for the poor. They no longer are able to pay the ‘fixed part’. So they need government help to pay the bill = higher taxes.

      • Most people (me included) won’t object a 10% tax to take care of the 10% needy people… if it actually were used in such a way. The fact is, for the most part it isn’t. Poor people are just human shields, pretext for power of the taxman. Who gets the lion share. When poor are mentioned, I know I am fed manure and robbed.
        Besides, poor won’t need the government paying their bill, if the government didn’t tax them so much in the first place

      • If it’s administered by the government, it will never be used that way.
        If poverty were actually to be solved, millions of government employees would lose their jobs and thousands of politicians would lose their best opportunities for graft.

  18. over 100 percent in Denmark since 1995 when it began deploying renewables (mostly wind) in earnest.

    Something is rotten in the state of Denmark

    • Denmark’s problem is that it is windy, and as long as they were importing electricity a lot, they thought they could use the same wires to export wind power and get even. Wrong. Electricity on demand is more valuable that electricity that falls randomly from the sky. They got away with it for a long time because neighbouring Norway has a lot of extremely flexible hydro power. But when Germany copied their approach, the wind power became less and less valuable, now sometimes going heavily negative when external effects are included.
      The grid planners could see the consequences, but the Tōhoku quake / tsunami just put more and more political effort on closing nuclear and trying to fill this gap with something that wasn’t there.
      I blame die Bundeskanzlerin Merkel for a lot of bloody stupid energy politics.

      • German political system doesn’t give her so much power, the Kanzler just follow the strongest political wind, or face replacement by someone with a better feeling. The whole of Germany is green mad, so is its head. Not the other way round.

      • It’s what comes of relying on the Greens to keep you in power. Sturgeon has the same problem in Scotland. The biggest disadvantage to any form of proportional representation is that you sacrifice the ablity to set policy and stick to it — at least until the next election.
        The Greens are never on present showings likely to form a majority goverment in any major democracy but they can do an awful lot of damage by insisting in their totalitarian policies as the price of keeping a party in power.
        Very much a case of the tail wagging the dog!

      • We are fighting like hell NOT to have proportional representation here in Canada. But idiot Trudeau wants to bring it in. if he succeeds the Greens will hold the balance of power forever even though they only have 1 federal seat now.

  19. Alan, what was missing from this otherwise excellent article was any mention of the subsidies that are provided to renewables, both on the capital cost and the electricity generated and sent to the grid, and how these subsidies distort the whole electricity market in any country where they have been implemented. The deadly combination of these two subsidies causes both gross over-investment in renewables to the detriment of coal and gas fired generators, and (in the UK, EU and Australia at least) significantly raises the retail cost of electricity to ordinary consumers through a clever but almost invisible mechanism that forces electricity retailers to buy expensive ‘renewable energy certificates’ from renewables generators in a faux ‘market’, the cost of which is simply added to the retail price. The government typically simply gives one of these certificates to the renewables generators for each megawatt hour (MWH) of renewable energy that they send to the grid, which by the way the retailers are forced by legislation to buy in preference to reliable base-load electricity. The electricity retailers must in turn buy one of these certificates for each MWH of renewable electricity that they sell. Currently in Australia these certificates are worth about A$85.00 per MWH, which represents a hidden subsidy of between 50 and 200% of the current wholesale cost of grid electricity. For example, last year one small 2-turbine community wind generator in the state of Victoria received about A$700,000 for its certificates, vs about A$450,000 for the electricity it actually sent to the grid. At the same time, base load generators have lost about 20-30% of their demand to renewables, causing them to become unprofitable and lowering their market value to the point where no new base load generation has been built for at least a decade, and is unlikely to be built whilst these subsidies exist. This is the most pernicious and economically damaging legislation that I have ever seen. And yet most of the governments that implemented it continue to support it, even as our electricity network becomes both more expensive and less stable. I’m sure that if this crazy scheme was used as the plot of a novel, no-one would believe it. How did we get to this point?

    • +1
      Without subsidies, we would have the right share of renewable, that is, just enough to make the best use of existing storage (not the other way round) and on-demand hydro.
      And price could even drop a little.
      Subsidies corrupt the economy. And the politics, of course.

    • I agree. I don’t think that Mr Schellenberger has thought through the roll of subsidies in higher electricity prices in his otherwise excellent article. For example, you don’t really have to push unneeded electricity off on your neighbors with disruptive pricing. If you don’t bribe the producers to generate it, they likely won’t generate it. The problem of course is that — as Warren Buffett has pointed out — folks wouldn’t build much wind or solar capacity if they didn’t have a guaranteed market.
      In Europe, there’s probably some excuse for renewable energy policies, since the easy alternative is a potentially unhealthy dependence on Russian/Middle Eastern fuel suppliers and neither region is one you really want to be dependent upon. California … not so much I think.

  20. https://wattsupwiththat.com/2017/10/22/weekly-climate-and-energy-news-roundup-288/comment-page-1/#comment-2643835
    Quote from the above SEPP article – TWTW Oct 21, 2017:
    “Number of the Week: 2.2 million workers needed to replace 52 thousand? One of the sillier essays in Politico stated: “And as jobs go, coal mining is now a tiny sliver of the U.S. economy, employing about 52,000 Americans last month, down 70 percent over three decades… By contrast, the solar and wind industries employed almost 10 times as many Americans last year, and they’re both enjoying explosive growth.”
    If this essay is correct (it is not, and the definitions are vague), the energy industry that employed only 52,000 in mining produced 30% of the US Electricity in 2016, but wind and solar required 520,000 employees to produced 7% (6% wind and 1% solar). To generate the electricity produced by the coal industry, the wind and solar industries would need 2.2 million workers. Who can afford such inefficiency?”
    My comment:
    WHAT IS GRID-CONNECTED WIND POWER REALLY WORTH?
    Wind power is intermittent and non-dispatchable and therefore should be valued much lower than the reliable, dispatchable power typically available from conventional electric power sources such as fossil fuels, hydro and nuclear.
    In practice, one should assume the need for almost 100% conventional backup for wind power (in the absence of a hypothetical grid-scale “super-battery”, which does not exist in practical reality). When wind dies, typically on very hot or very cold days, the amount of wind power generated approaches zero.
    Capacity Factor equals {total actual power output)/(total rated capacity assuming 100% utilization). The Capacity Factor of wind power in Germany equals about 28%*. However, Capacity Factor is not a true measure of actual usefulness of grid-connected wind power. The following paragraph explains why:
    Current government regulations typically force wind power into the grid ahead of conventional power, and pay the wind power producer equal of greater sums for wind power versus conventional power, which artificially makes wind power appear more economic. This practice typically requires spinning backup of conventional power to be instantly available, since wind power fluctuates wildly, reportedly at the cube of the wind speed. The cost of this spinning backup is typically not deducted from the price paid to the wind power producer.
    The true factor that reflects the intermittency of wind power Is the Substitution Capacity*, which is about 5% in Germany – a large grid with a large wind power component. Substitution Capacity is the amount of dispatchable (conventional) power you can permanently retire when you add more wind power to the grid. In Germany they have to add ~20 units of wind power to replace 1 unit of dispatchable power. This is extremely uneconomic.
    I SUGGEST THAT THE SUBSTITUTION CAPACITY OF ~5% IS A REASONABLE FIRST APPROXIMATION FOR WHAT WIND POWER IS REALLY WORTH – that is 1/20th of the value of reliable, dispatchable power from conventional sources. Anything above that 5% requires spinning conventional backup, which makes the remaining wind power redundant and essentially worthless.
    This is a before-coffee first-approximation of the subject. Improvements are welcomed, provided they are well-researched and logical.
    Regards, Allan
    * Reference:
    “E.On Netz excellent Wind Report 2005” at
    http://www.wind-watch.org/documents/wp-content/uploads/eonwindreport2005.pdf

    • What is true is Allan is clueless when it comes to electric power.
      He likes to cherry pick one event, one place in the world, and ignore everything else.

  21. The existence of solar and wind power sources, per se, does not cause any price increase. It is laws that force power distribution networks to give preference to power from those sources that causes the increase.
    The near-total ban on coal power plants that began in the Obama administration (and has caused most of them to be decommissioned so that Trump can’t bring them back) also takes away a cheap alternative.
    What we need is a free market in energy. (And don’t complain about externalities unless you can put numbers to them.)

    • Don’t ask for number, you fool. They will make up needed number. 50$/t coal, for instance, because, you know, CAGW.

  22. I can only say that solar is able to sell electricity at $0.02 to $0.03 per kWh in India. This is because, in spite of any ‘words’ to the contrary, electrical power in India is paid for based on its availability at the moment. This tells you what the ‘intermittent’ power alternatives are worth.

    • What’s the monthly income of a poor family in India and how much electricity do they consume?

    • electricity at $0.02 to $0.03 per kWh in India.
      ≠====≠==
      The average wholesale price of electricity in the US is about $0.034 per kWh.
      When the wind blows and the sun shine the wholesale price drops to zero. Normally that would cause inefficient producers to stop producing.
      To solve this governments pay wind and solar to keep producing even when the wholesale price is zero. Even when electricity is free the wind and solar companies are paid to keep producing.
      Even if the price goes negative the wind and solar producers are paid to keep produce something electricity while at the same time other people are willing to pay you money just to take their electricity.
      And people wonder why costs are rising?

    • Yes but we here in countries that guarantee electricity generation 24 hours per day 365 days of the year will never agree to blackouts or brownouts. Solar is good for areas that dont have electricity without it.

  23. If there could ever be any benefit to be derived from Wind and Solar power production, it would have to be as a supplement for a specific application; obviously hooking it up to the overall grid has no value, but added to an airport’s local grid or running air compressors in a large industrial park, might have some appreciable value.

    • Yes. Wind and solar should only be hooked up to equipment that is fine with a variable supply. The problem is that electricity is sort of like a river. When it is flowing smoothly no problem. When the flow is changing rapidly it creates enormous problems all along its length.
      As they say. It is called power for a reason.

  24. There’s an important concept in economics. Substitution. When a good or service becomes too expensive, folks “substitute” something else. (This is why we will never “run out” of resources, too. Something becomes scarce, we substitute something that isn’t.)
    Well, electricity in California is expensive. The chart says approaching 30 ¢ average. The tariff I pay is 19 ¢ baseline, about enough power to read your bill /sarc;, and then it goes to 32 ¢ / kW-hr.
    Now a gallon of gasoline ( yes, I’m in the USA. I could do all this in metric but the units are just clumsy) is a nice standard for energy bought. We see the price posted all day every day. A useful concept for comparing fuel economy in different kinds of cars (propane, alcohol, electricity, …) is the Gallon of Gasoline Equivalent. (The US Government pushes this for cars here.) Presently, here, it’s about $3.25 in California (closer to $2.25 in the rest of the nation…)
    So what does a “Gallon” (of gasoline equivalent) of Electricity cost?
    There are 3,413 BTU in a kW-hr.
    (British Thermal Unit – raise one pound of water one degree F)
    There are 114,000 BTU in a gallon of gasoline.
    114,000 / 3,413 = 33.4 kW-hr in a gallon of gasoline.
    33.4 x $0.32 = $10.69 / “Gallon” of gasoline equivalent electricity.
    So if you are using electricity for things like an All Electric Kitchen (like mine), it is about 1/3 the cost to break out your Coleman Camp stove and use it instead. (About 1/2 the price to use your propane BBQ / stove on the patio). It’s even more economical than electricity to use Racing Alcohol motor fuel in a Trangia like “spirit’ camping stove. (That’s what I now use to make my morning coffee. Silent and efficient.)
    In short, wind and solar electricity make it highly economical to use gasoline stoves and burn wood in your BBQ or propane in a grill /stove combo. So every morning I make my coffee over methanol / ethanol fuel, and cook my breakfast with gasoline… instead of using my electric stove.
    https://chiefio.wordpress.com/2018/04/24/gallon-of-electricity/
    Oddly, in the Central Valley, PG&E has a time of day tariff for mid-summer peak AC demand that is almost $1/kW-hr. At that point it is a major money maker to run your own generator to power your AC. That would be roughly $33 / “Gallon” GE for the electricity. Another interesting rule of thumb in American units. Take the cost of a gallon of Diesel and move the decimal over, you get the approximate cost per kW-hr of the fuel used in a generator. Diesel is presently $3.75 near me. (Much cheaper in the non-taxed off road form out in farm country central valley). That’s 37 ¢ / kW-hr electricity. So folks are being encouraged to run their AC off small personal Diesel generators during summer. To “save the planet”…

    • good comment.
      You could add water heating, keeping you house warm, industrial process, etc.
      Electricity use seems to reach a plateau, not because it lost appeal, but because of insane taxing

    • Excellent comment.
      I generally reckon a litre of kerosene or diesel is about 10kWh. Its near enough.UK prices on a (non road use) litre are around £45p – equating to 4.5p per Kwh which is way lower than end user prices of electricity (although wholesale is around the 4p mark – the rest is grid distribution and greencrap)
      That means that for space heating is far better to use oil or even gas as an energy source.
      This is not allowed. Not for new houses. They MUST use gas or electric heat pumps. In winter, when heating is most used these typical air sourced heat pumps cant cope and dont do the 3 or 4:1 gain but need boosting with electricity that isn’t pumped. So gains of 2 or less are seen
      Making winter heating bills twice the cost of oil heating.

  25. We complain about rising power rates but they fall on deaf ears. Both the power companies and governments profit from higher electricity prices. Though politicians and CEOs may express concern and say they are working toward reducing the cost of electricity, this is actually not in their best interest, there is no financial incentive to reduce them. The financial reward is found in driving prices higher, and so more wind and solar farms are being built.
    If you were in their shoes, you’d probably do the same thing.
    The way to stop this lunacy is to make higher electricity rates unprofitable for both governments and power companies. I have no idea how that can be done.

  26. “…The main reason appears to have been predicted by a young German economist in 2013….”
    That is historically wrong. Such predictions were accepted wisdom in electrical generation circles in Australia, at least, from the 1970s. The real costs of intermittency were modelled and quantified way back then. It was so clear that large scale renewables were rejected out of hand as a future source of any magnitude.
    Although Michael Schellenberger has got it right with most of his essay as reported, and thank heavens that somebody of prominence finally has, there is very little in the modern electrical sector that was not understood back in the 70s, even before then. (My employer company was suddenly involved in nuclear economics from about then and the steep learning curve contained much the same as Schellenberger reports, ours being modelled, his being observational.)
    In Australia, the biggest impediment to a decent, low cost electrical supply like we used to have is political ignorance in accepting the demands of the Paris Agreement, then believing in the fairy tale that we can satisfy Paris and lower costs at the same time. Anybody who did not see this years ago should not now be in the business of offering advice about electricity costs today. Geoff.

  27. A cogent explanation of the seeming paradox of why those hard-headed Victorian mill-owners changed from ‘free’ water-wheels to ‘expensive’ steam power.

  28. While it is good that one environmental activist has finally grasped that “renewable” generation is expensive, he still has problems with the details.
    The reason that cost reductions on solar panels and wind turbines has not reduced electricity prices is that the reduction has been from insanely expensive to stupidly expensive. It is still nowhere near the price/performance of other forms of generation. So the more “renewable” generation, the more expensive electricity becomes.
    As for “predicted by a young German economist in 2013” I knew it in the 90s and would have known earlier, if I had bothered to research it.
    The only country that is benefiting from wind and solar is Norway; they buy cheap electricity from Denmark, when the wind is blowing, and sell Denmark expensive electricity, when the wind is not blowing. They can do this because much of their generation is hydro which can be switched on and off quickly and which is limited in average output by water availability but can drastically exceed average output when required.

    • Solar panel ARE cheap. You find them <$0.5 / W. And, with all other thing needed (inverter, cable, rail to fix on a roof, etc.), you are in the ~$1/W of material. Rule of thumb, this means ~$0.1 /kWh electricity price.
      Far from "stupidly expensive". So cheap that panel no longer matter in the price of a solar installation, and that's the main problem: other cost don't drop. Even if the panel were free, a solar installation would still be uncompetitive: you now have to move, install, graft to your house electric system, do paperwork to be allowed by your grid manager, etc. Doubling and tripling the cost.
      And still work during sunshine hours, not when needed.

      • this means ~$0.1 /kWh electricity price.
        Or twice the price of gas, coal or nuclear PLUS about another 3-10c/KWh for storage backup etc etc.
        In one post you have clearly identified the whole problem. You think that is cheap, It is not

  29. A Tesla automobile costs 120000. A spectacular price reduction of 50% does not mean that it becomes the main transportation choice for everyone. The green advocates creatively intermix relative and absolute numbers.

    • Economists don’t need to note that, it’s the politicians that need that educating.
      I got my Econ degree back in the ’70s and we covered both economies of scale and DIS-economies of scale. That then led to the discussion of Minimum Economic Size and Maximum Economic Size.
      For a Steel Mill, the Maximum Economic Size is essentially global demand. Minimum economic size was about 1/2 continent of demand, then various improvements in small scale were made and Nucor started to be the hot steel company instead of U.S. Steel. The other side of the coin is Hotdog Carts. Minimum economic size is One Cart. Beyond that, it starts being increasingly expensive to coordinate the different carts, hire staff (instead of doing it yourself) and keep quality up. Maximum Economic Size isn’t much bigger than one cart. (You can do franchising to extend that, but the individual unit tends to stay one big cart.)
      It is the politicians and folks who had One Intro Class (or none and just heard “Economies Of Scale” a few times and thought that was it…) that need to be slapped up side the head and forced to study DIS-economies of scale. Us Economists have already studied it for a long time…

    • John Garrett: And a demonstration of DAT economy for greens (i.e., “nice coal plant you got there, mate. Be a shame if you got no subsidy for it, eh.”).

  30. Here in the UK, we routinely now see sheep-like press reports that ‘Such and such a country/area/city recently ran on 100% renewables….’
    Oddly, no headlines when there’s no wind, and its night time, so ‘0% renewables….’

    • Heard on radio yesterday “UK record three days burning no coal for electricity (true)”
      “Most of our electricity is made by wind and gas (untrue)”
      Gas yes, not wind.
      In 2017, http://www.gridwatch.org.uk recorded
      Wind : 11.6%
      Gas : 42.9%
      Nuclear: 23.5%
      Solar : 3.7%
      Wood : 7.4%
      Coal : 5.2%
      Hydro : 1.4%
      With imports (mainly French nuclear) making up the numbers.
      to date, this year things are little different.
      A little more coal and wind and a little less solar and nuclear
      We still rely overwhelmingly on thermal power with gas nuclear coal and wood representing nearly 80% of total demand.
      Intermittent renewables are less than 20% (thank Clapton!)

      • “UK record three days burning no coal for electricity (true)”
        But they have to be on standby so they are burning coal and producing evil CO2 the reason behind the renewable energy boom.

      • No, I dont think they are on standby: there is enough gas to cover any emergencies. Right now we have well over 12GW of gas capacity off line.

      • If the wind stopped completely, all other forms of power would be able to pick up 100% of the slack?
        Really? In that case why not get rid of coal altogether since it isn’t needed, ever.

  31. Journalists must be very careful what they are skeptical of, or they might end up unemployed.

  32. It is, of course, the fact that renewables like wind/solar are unreliable. When they account for a small percentage of power, their unreliable nature is handled by the grid without much problem. But when they account for a substantial amount, the grid needs backup reliable power generation and that means you have a system that includes lots of duplicative capacity, and it costs a lot to maintain enough backup capacity- you have to keep it online,ready to go. Renewable folks now are preaching battery storage as a solution, but batteries can store limited amounts of power – enough perhaps to allow excessive noontime solar power to be shifted to evening, but cannot handle days (or even hours) of coudy weather or windless condiitons. The wind has this bad habit of dying off during stationary high pressure weather – when temps are the highest and power demand the greatest. Figures show Texas wind producing at insignificant 3 to 5% levels when demand is greatest during hot summer days. Solar arrays also actually produce less power during hot summer days.

  33. How would the analysis change throwing an electricity distribution network good enough to being together demand and production over a huge geographical area? China is pushing for such network.

  34. Mr. Shellenberger, your estimate of rising electricity prices in DK is not well documented in your links.
    It is true and obvious that the consumer price, including taxes and VAT is high and increasing, however the (cost)price before tax and VAT is not.
    See this link with the prices from 2007. It may be, that you have access to data from 1995, then please show them to validate your claim.
    https://www.mm.dk/videnbank/artikel/elpriser2016

    • It is true and obvious that the consumer price, including taxes and VAT is high and increasing, however the (cost)price before tax and VAT is not.

      Taxes in Germany account for 55% of the retail price. The Renewable Surcharge alone accounts for 23.6% of the retail cost. The transmission system operators pay for the costs of connecting the renewables to the grid. Grid charges account for 25.6% of the retail price. The VAT tax (16%) is the only tax that is not related to the generation and distribution of electricity. Comparing prices before tax and VAT is misleading and invalid.

  35. Blaming ignorance, which appears to be the aim of this article, is very often counter productive.
    I find it hard to believe that journalists, politicians and activists in general are ignorant to the realities of this article. On the contrary I believe that the activists mostly know that they promote more expensive electricity, and they do this on purpose, because this is an element of their green religion to reduce the material standard of living, and they lack the historic perspective to see how affordable energy has taken us from slavery to affluence.
    The journalists and politicians may possibly understand less, but they listen to the loudest voices in the cases where they don’t outright belong to the activist groups.

  36. This is crazy. California does not need to go all the way to Denmark or Germany. Both of those countries are blessed with hydro that can be used to balance wind and keep costs down. Instead they should look at an independently operating grid within their own continent that is managing 18% wind and has plans to ramp that up along with solar. That grid maintains some of the lowest electricity prices in the world. ERCOT.
    The issue is not the technologies themselves, the issue is the market mechanisms.
    Let me ask it this way – what penetration would ERCOT need of wind and solar before you all eat crow and admit that wind and solar can be a substantial part of an electricity mix without driving up costs? If it is 20% (the same as Nuclear) then get ready to eat your words next January, because by next January ERCOT will have delivered a full year with wind generating 20% of electric power and still providing electricity prices that are below average in the US. Otherwise you would have to say that Nuclear is only a bit player.

    • Excuse me, Denmark and Germany blessed with hydro???
      Denmark’s highest “mountain” is less than 500 ft and they have no lakes nor major rivers.
      Germany’s hydro power production is less than 15% of their total production. Germany pays the Swiss to receive surplus power, Denmark are lucky to get a nominal price when they can transfer wind power to Norway and Sweden.
      How about naming your imaginary paradises.

      • At 15% Germany has about 2x the portion of its electric power coming from Hydro than the US. ERCOT that fraction is (rounded to the nearest whole number) 0%. Denmark – thank you for biting. Denmark is connected via undersea HVDC to Norway and Sweden. Given that the Danes can import as much hydro as they want any time they want then I would say, yes they are blessed with hydro and are able to use that to balance wind.
        My point is that it is not the technology. The technology is kind of irrelevant. If you have a stupid market based on coal or a stupid market based on wind in either case you will have bad results. Wind can clearly make 18% penetration without driving up prices even if you have little or no ability to export surplus power, and it can do so in a market where wind drops during times of peak demand (hot summer days).

      • chadb
        The Danes are blessed with the highest energy price in Europe after Germany!
        Is that your paradise?

      • To RPT – No, I am not saying the Danish model is one we should follow. What I am trying to say is that the Leftist model of forcing renewables regardless of the consequences is a recipe for disaster. In ERCOT there were some low penetration standards passed early on that have been massively blown past and are totally irrelevant at this point. What ERCOT did was build transmission lines and deregulate the energy industry. The Feds kicked in a (now) $20/MWh subsidy. I am totally fine with dropping the subsidy altogether, it should be dropped. Same for solar, and the tax incentives should be dropped as well (accelerated depreciation and so on).
        However, in current environment the best capital was spent not on repairing labor intensive coal plants, but on building capital intensive (low labor) wind farms that would then be backed up by low capital low labor high fuel price Nat Gas. That is, if your gas plant is running half the time your highest cost is still fuel (not labor or capital). The gas plants are then timed for maintenance in spring/fall when wind production is high and demand is low.
        Personally I don’t give a rip where my electrons come from. I am technology apathetic. However, what chaps me is when people point to technology to explain a market failure. The Danes and the Germans have ridiculous markets, and the best technology in the world cannot fix that problem. Stop comparing to stupid markets and instead look at rational ones.

      • Danes can import, but they can’t import as much as they want. Especially since Norway is determined to electrify their transportation fleet. They are soon going to be needing all of that hydro power for themselves.

    • 1) The claim that Europe in general and Germany in particular have some of the lowest cost electricity in the world is so wrong it’s laughable.
      2) Germany’s grid is only stable because they are able to buy and sell electricity from the rest of the European grid with which they are heavily interconnected.

  37. The Windmill Industry here in Oklahoma has been advertising heavily on television lately, promoting wind power, and one of their talking points is that wind power will give us cheaper electricity.

  38. Waaaaaay back in the 70’s, while stationed in Hawaii, solar panels for homes were coming into use. First there was the large tax credit for installing them and then the idea of lowering your electric bill made sense with a lot of people. Even then it was common knowledge (for those who wished to be knowledgeable) that while revenue would decline as more and more people installed solar, infrastructure costs of the grid remained the same. So of course the cost of electricity from the grid had to go up for everyone to keep revenues where they needed to be. As the cost of electricity rose, it made the use of solar more desirable which of course lead to the need to make up for the additional lost revenue with additional increases in price.
    The sad thing was those who could least afford solar panels were hit hardest by the rising cost of grid electricity.

    • One of the last jobs I did for my former employee was to estimate the payback time of a solar roof installation the company did, solely for non-profit political reasons.
      The local situation was that grid power could be split into 3 roughly equal parts: Tax (partly to pay for solar subsidies), electricity cost and grid costs.
      In the case of roof solar, grid costs and taxes were zero, and there was obviously no real estate costs as the roof was “free”.
      At the current extremely low interest level, and excluding the subsidies for the solar equipment/installation, I estimated the payback time to slightly below 40 years.

      • If the payback period was 40 years then it is in reality never, since it is unlikely the panels will last that long. As a separate question, what did you use for the discount rate? My suspicion is that if the discount rate was anything over inflation the NPV of the install would be negative and the payback would be never.

      • And it’s not just payback that’s needed, to sustain renewable power long term, you also need as much in net profit again, in order to afford to replace it at end of its life cycle.
        People who bought the sales pitch, that all they need to do is to have it pay for itself, are failing to understand how they’ve painted themselves into a financial corner. i.e. they won’t get payback, PLUS the net profit for self-supplied recapitalisation funding, to replace the now rapidly aging degrading and failing system, that is now unreliable, or has failed.
        People seem to think these will just keep working.
        Meanwhile, they’re one hailstorm or cyclone/hurricane away from losing power for months.
        On top of that, your relationships and family will be severely stressed by such shock outcomes and the sudden financial stresses and its inconvenient truths about renewable grid independence.
        Good luck with that, as the LEAST of your real costs will be measured in dollars. There are going to be bigger prices to pay, over time.
        And I hope you didn’t operate your business on the renewables in that casd, because if you did you’re now properly stuffed, for the foreseeable, as are your now unemployed staff. What’s not to like?
        Meanwhile, your retrograde neighbours who are still on mains supply, lost their supply from the storm for just two days. It was novel, like camping, but way better, and they made lots of whoopie in bed to pass the time. Candles are useful.

  39. I had my solar panels installed in early 2012 here in the Netherlands. Back then I still believed the whole global warming story but I don’ t regret it from a financial point of view. A kWh cost me around 25 (euro) cents back then including energy tax and VAT. In the years there after the cost gradually dropped and I am currently paying just under 18 cents per kWh. The reason for the decline is that we have a lot of competition in the energy market and fossil fuel was forced to compete with cheap green energy. The link in the article above shows a decline in price of 13% but I know from my own experience the is more like a 25% drop in cost since 2011.
    The difference with other European countries may be that our government left it to their citizens if they wanted to invest in solar on their roof, or buy a share in a windmill. They did not subsidise green energy nor did they impose additional taxes for green projects. Next year I will break even on my solar and since we have net metering here it will even become more beneficial from there on. I may have been duped but financially it worked out very well for me. 🙂

    • Government can see paying less for energy as an income and tax it. Don’t worry they will find a way to keep you poor .

      • Good point Robert. Currently I get the exact same amount for a kWh I feed into the grid as I have to pay for every kWh I take out of the grid, the so called net metering. That could stop in a couple of years and maybe I would only get the bare kWh price of around 6-7 cents per kWh or so but since I already earned my investment back it will still be additional profit on my behalf. We will have to wait and see…

  40. 1) Electricity price rises in the US are understated. The Federal tax credit dollars used to subsidize wind and solar aren’t conveyed on electricity bills. The German subsidy system is funded through power bills, so they see the price impact directly. We just see more Federal debt.
    2) California electricity prices are rising because they chose to favor the least economic renewable energy. Behind the meter solar is much more expensive than utility scale solar. With net metering, residential solar can be paid more than $200/MWh. Subsidized utility scale solar projects are signing contracts for under $40/MWh. Other states have less net metered resources, so their rate impacts are less.
    3) Colorado gets roughly the same fraction of electricity from renewables as California and has not experienced significant rate increases. Most Colorado RE comes from utility scale wind projects. Subsidized utility scale wind projects provide power for about the same cost as the fuel to run coal and gas plants, so there is little impact on rates. As noted in the article, even in this area moving to RE will eventually lead to rising rates because of curtailments.

  41. This guy seems sincere in his environmentalism – much more sincere than Moonbeam. Ironic that popular perception is the opposite.

  42. Instead of paying for baseload mains supply alone we’re being forced to pay for two electrical generation systems and their infrastructure. Why wouldn’t that make for cheaper electron delivery?
    Thie was a foreseeable economic nonsense 15 years ago.
    The other major problem with ‘renewables’ is they are literally not renewable, because they won’t pay for themselves during their operational life. This whole ideological pipe-dream of renewable energy is STILL flat out uneconomic. People are simply kidding themselves about how expensive the entire operating installations are.
    And then the subsidies will disappear with the politics of the next GFC v2.0 crisis and aftermath.
    i.e. no recapitalisation funds returned, as the investment for the first installation never made a net profit, sans subsidies. They wear out and degrade before they make any money to recap their capacity.
    Unecononic = endless money pit that’s sending you broke.
    Thus ‘renewables’ largely won’t be renewed. It’s a technology option for losers.
    So the glib fans of much alleged ‘renewables’ will deny that also, as they do, until they can’t ignore it any longer. Many companies have foreseen this outcome, so are visibly just cutting their losses and deciding profits are much preferrable, and bailing out.

  43. Electricity rates skyrocket, where did I hear that before?
    Oh yeah, in January 2008 when he was running for President, then-Senator Obama, said that under his plan, “…electricity rates would necessarily skyrocket”
    One of the few times Obama was honest.

  44. Well written article, Mr Shellenburger, but late to the party and you totally ignore the real reason – huge sums of money going to the people who got the solar or wind energy subsidies that were only needed because everyone knew industry wouldn’t invest in unprofitable wind and solar projects without massive government largess! The first rule a politician should be required to learn and follow is: Ask someone who knows before squandering taxpayer money! In this case, it would be engineers and utility operators! Never ask the “environmentalists” as their bias colors all their projections! Politicians are mostly worthless and the bane of all rational thinkers everywhere! Things would change if the politician had to pay for their mistakes with their own money, not that of the taxpayers!

  45. I have a theory too. People do not bother to read and understand their electric bill.
    Drove by Starbucks the other day and noticed the long line at the drive through.
    If they got a bill once on month from Starbucks they would love the power company.

  46. I have been reading and understanding my power [bill? -mod] for 40 years because I work in the power industry.
    Electricity is a very cheap commodity to produce and deliver. It is too cheap to meter for most users. The benefit is huge, the cost is low.
    If you ever looked at a few utility annual reports for costs of producing and delivering power you would agree.
    But there are other costs. Taxes, lawyers, and social engineering. It would appear the environmental attorneys worry more about country club dues than the environment.
    Before blaming the cost of making electricity with wind and solar, I would start with taxes and income redistribution schemes.

  47. This article expresses the logic that any human with half a brain should’ve realised. If there is a desire to have a reliable grid and you spend money to make it unreliable , the cost to make it reliable again will make it more expensive whether that is gas fired back up ,batteries, Snowy 2 , etc. The fact that renewables are becoming cheaper to install it’s still a cost ( which has to be more than zero ).
    However, watch for the next stage of unintended consequence when large corporate users decide to generate their own electricity and go off the grid because of increasing costs. That will mean that the cost of running the grid would then be shared amongst less users meaning that the costs will need to increase again. I foresee that the current policies of many governments will cause a vicious cycle of never ending electricity price rises.

  48. Cutting back how much power a fossil fuel or nuclear plant generates only has a small impact on how much it is going to cost to operate that plant.
    On the other hand, trying to spread the cost of the plant over less power means the average price of that power is going to go up.
    And that’s before we talk about being ramped up and down is very inefficient for plants that were not designed to operate that way.

  49. You might liken it to a solar powered car whereby cheap nano solar paint can provide all the power the electric motor needs to climb hills and exceed the highway limit in bright sunshine. In fact at midday there’s electrons to burn but it’s obvious what will happen as the sun sets or it’s raining and overcast. No matter this is the world of the autonomous car and paywave per kilometre so just call up an ICE car although they’re more expensive per kilometre because they’re all carbon taxed to subsidise the nano solar paint cars running around. What has happened to the overall cost of motoring should be obvious in peak hour when everyone wants to call up ICE cars as the sun is setting. It’s a no brainer that we’re all interested long term in the average cost per km rather than the lure of fleetingly low marginal costs and capital costs are an integral part of that.
    That’s what the technical and economic illiterates have done with a communal electricity grid largely designed around a few large despatchable generators that can follow demand with appropriate voltage and frequency. They ruined the level playing field and in the process produced a pure form of dumping that would normally raise the ire of anti-competitive authorities. What should have happened if it was deemed CO2 was the big bogeyman, then tax CO2 for all players equally at the price the supreme guru knows will bring the earth’s temperature back to the temperature the supreme guru knows it should be, but there was one more obvious caveat. No generator can provide anymore electrons to the communal grid than they can reasonably guarantee 24/7 all year round (ie short of unforseen mechanical breakdown). That way the unreliables’ dumping game is over and to lift their average tender they must incur the cost of storage and/or partner with thermals and pay them their just insurance premia they’ve been avoiding now. Actually the grossly perverse whereby the thermals have been cross subsidising the capital cost of the dumpers with RECs and the like.
    There is of course another overall cost consideration with many spatially diverse small generators and that’s voltage and frequency control which is largely dumped on the managers of the poles and wires but that’s a hidden cost that the technical and economic illiterates never seek answers to and those that would know to bite their political tongues. In South Australia with generation and distribution separation it allows the unreliables fans to point to much of the rising costs of renewables as ‘gold plating’ of the poles and wires. When the Green overlords rush out 9 diesel generators that can consume 80,000 litres an hour of refined diesel you know something’s rotten in the state of Denmark but look over there at the unicorn Tesla battery folks.

  50. I wouldn’t worry Audrey as the unreliables haves don’t want to leave the insurance of the grid with expensive batteries, just pass the premiums onto the have nots and all with the warm inner glow of saving the planet-
    https://www.smh.com.au/business/the-economy/i-m-truly-concerned-aemo-chief-warns-on-rooftop-solar-20180424-p4zbg0.html
    ‘Economic bypass’ you say? One for the watermelons to get their small brains around but they might look up the old ‘fallacy of composition’ for a refresher in one of the basic laws of economics, although they might also muse on ‘From Gaia according to her ability and from the grid according to our need’ for some irony.

  51. “Evidence for this hypothesis comes from the fact that nuclear energy leaders Illinois, France, Sweden and South Korea enjoy some of the cheapest electricity in the world.”
    Huh?
    South Korea? not cheap

  52. It’s called the Utility Death Spiral. As renewables get cheaper more people generate their own electricity. That gives the utilities a smaller market share so prices go up so more people generate their own power.

    • Well there’s nothing like going along with the Green numpties to help the spiral along a bit and create a bit of scarcity for your product all in the name of saving the planet. Recall AGL are going to close Liddell power station and from wiki-
      “Liddell Power Station is a coal-powered thermal power station with four 500 megawatts (670,000 hp) GEC (UK) steam driven turbo alternators for a combined electrical capacity of 2,000 megawatts (2,700,000 hp). However, as at April 2018, its operating capacity has been assessed at 1,680 megawatts (2,250,000 hp).[1] Commissioned between 1971 and 1973, the station is located at Lake Liddell near Muswellbrook, in the Hunter Region, New South Wales, Australia.
      Prior to September 2014 Liddell power station was part of NSW Government power producer, Macquarie Generation.[2] Macquarie Generation’s assets were acquired by AGL Energy in September 2014.[3]”
      So what are they replacing it with? Only 252MW of gas fired power along with more unreliables-
      https://www.msn.com/en-au/money/company-news/agl-announces-newcastle-gas-fired-power-plant-to-replace-the-liddell-power-station/ar-AAwmfXV

  53. Interesting article and interesting discussion. It all goes to show that the average person does not understand the economics of power generation, the requirement of transmission infrastructure build out to reach wind and solar, the need for reserve in its most expensive form, and the complexities of grid management.
    You folks likely know this better than I, but much about the power industry is counterintuitive. For instance, it makes no sense to most people that when the populationreduces its energy consumption, electric power rates must rise – the resulting revenue shortfall must be made up.
    Here, human perception comes to play again: wind and the sun are free and they are adding to the supply of power. Decreased fuel cost and increased supply MUST lead to lower prices. But they don’t and most people are surprised at the sharp cost increases.
    I see no conspiracy among Greenies and journalists here. The decision to go with solar and wind has been made to move away from carbon. Whether we like it or not we will pay for electricity one way or the other, either through rising costs of renewables or the catastophic effects of putting large amounts 200 million-year-old carbon into the atmosphere.
    I live on Miami Beach where sea level had risen 14 inches since 1988 alone. As a result, the City is in the midst of a half-billion-dollar infrastructure project to put in huge pipes and pumps, to push water back into Biscayne Bay – because during the King Tides in October, if it rains, cars float. Even so, I could easily live to see the end of South Beach. One big Category 5 hurricane could do it in.
    The Department of Defense has stated that climate change is the single greatest threat to our national security. That, and the overwhelming scientific concensus that anthropogenic global warming and climate change are facts, should give us a sense of urgency to solve this problem. We should be throwing everything at it we can. In the scheme of things, an increased electric power rate is a small price to pay.
    If not, make sure you visit South Beach now, before it’s gone.

    • Atlee stop looking out your condo window at Miami Beach and projecting your RE problems onto the world-
      http://dailycaller.com/2016/07/10/miami-is-sinking-but-that-doesnt-mean-sea-levels-are-rising/
      Thankfully we are enjoying a long interglacial warming and here’s the real scientific picture of that sea level rise globally- http://www.cmar.csiro.au/sealevel/sl_hist_few_hundred.html
      Basically you don’t cherry pick the tide gauges for Venice and Miami and run around like Chicken Little calling the end is nigh.

    • “overwhelming scientific concensus”
      Please enlighten us. Consensus about what conclusion, exactly?
      That climate is changing, like always?

    • “I live on Miami Beach where sea level had risen 14 inches since 1988 alone.”
      Wrong-o, Atlee. Miami Beach has sunk such that the relative sea level has “risen 14 inches since 1988 alone.” Actual sea level rise of about 1.7 mm/yr has resulted in a real sea level rise of about
      2 inches (51mm) over that period.
      The other foot of relative sea level rise is caused by land subsidence. Whacking at CO2 will not change that.

    • Atlee: “The Department of Defense has stated that climate change is the single greatest threat to our national security.”
      Indeed. It infects governments leading to their making increasingly irrational decisions. It is a form of insanity.

  54. It is, or should be, fairly obvious that renewables will cause electricity prices to rise. In extremis 100% replacement of fossil fuel with renewables means complete duplication of the required generating capacity. So you pay for the fossil fuel generation and then pay again for the renewable generation. the one does not replace the other but duplicates it. Then you have to add the cost of re-engineering the distribution system for renewables. Then you have to add in the market inefficiencies imposed by governments to enforce use of renewable generation and the cost of subsidies to some consumers at the expensive of others.
    The alternative might one day in the future turn out to be a combination of renewables and batteries, but not for a long time yet.
    All this is obvious without recourse even to the most simple back of an envelope calculation.
    Large scale renewable energy is a con, a political project relying on a combination of gullibility, ignorance (children are being weaned of hard subjects like maths and science), and fear of extinction of the human race at our own hands for selfish reasons linked to filthy capitalism.
    There is another option. Don’t back up renewables with reliable fossil fuel generation. This would please the anticapitalists prominent in the Green movements but no sane government would openly adopt such a policy. But there are signs not all governments are sane.

  55. The real reasons why with renewables electricity is going up in price and not down.
    1. Wind turbines do not produce 50/60Hz electricity. They do produce ample harmonics termed in the industry as dirty energy and which through smart meters are fraudulently added to consumers power bills. Wind turbines are a massive rort.
    2. While PV solar panels may heat ones own water the panels do not have enough grunt/oomph to push that electricity to the boundary, up the street and into a neighbours property to heat their hot water. No one should be paid to supply solar power into the grid

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