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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:
- 51 percent in Germany during its expansion of solar and wind energy from 2006 to 2016;
- 24 percent in California during its solar energy build-out from 2011 to 2017;
- over 100 percent in Denmark since 1995 when it began deploying renewables (mostly wind) in earnest.
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 for 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.
Hirth predicted that the economic value of wind would decline 40% once it reached 30% of electricity, and that the value of solar would drop by 50% when it reached 15% of electricity.EP
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.
So they are closing the power plants that are the perfect compliments to the Renewables; Nuclear Generators.
Nuclear plants are ideal for being used as load followers, they have quick reaction times and can idle very effectively. What confuses many is that Nuclear Plants have typically been used as base loads, this is due to the economics of not having to refuel, etc. but if Solar and Wind take over the base load, then Nuclear Plants can be switched over to load following.
But of course the Greenies will never let this happen.
If you want a thousand dollar a month power bill in the winter months, switch to wind and solar. That’s what happened in Ontario and people couldn’t afford it so they don’t have power anymore. They’ve been sent back into the 1700’s as have many people around the world which has led to fewer people now having electricity than there used to be. As governments start to run out of money subsidizing these wind and solar scams the burden gets shifted to the consumer, many who can’t afford the price as well, so they don’t have power anymore.
Often when something fails it doesn’t do so because of just one flaw.
Renewables are non-dispatchable, yes. They consume network resources that they aren’t required to pay for–although that scam may be just about over. There is also not enough savings available to go on these proposed crash programs to replace the present system with renewables in a decade or two, or even three. The crash program can only happen in three decades if we allow renewables to crowd out all sorts of other tasks.
Then another flaw rarely spoken of is that renewables contain a great deal of embedded energy. I once calculated that wind turbines contain a couple years worth of their energy production in all the steel, concrete, and specialty materials they contain. And that is without considering battery storage.
Then people speak of renewables as providing lots of high paying jobs. Well a person can’t propose lots of high priced labor and expect to lower costs at the same time can they? And what if renewables do cause the price of electricity to increase three or more times, and we have to begin making all the energy intensive materials for renewables out of renewables? What will happen to costs then?
Finally, at their present scale of installation, they are not quite an ecological disaster (views, birds, bats…) but what about at ten times the present scale?
Author failed to mention (or I failed to notice his mention) that someone has to pay the extra cost for adding a parallel system that is completely unnecessary.
I live in Illinois. Our prices are high. Not counting existing taxes and with a governor looking for sins to tax even more. So, the author is saying it will be worse, then? The only thing the author didn’t note was the correlation between less coal and higher prices.
Our experience is that the fix that is in for wind has made it impossible for competitors to sell their product on the grid except in a back-up role. So, we have and will experience even higher prices and will separately be forced to subsidize wind’s competitors. To illustrate, the Clinton nuclear power plant is surrounded by wind fields (Bloomington, Normal, Maroa and in the process of building one in Clinton itself (with credits paid by us)) producing a fraction of the capacity of the nuke while the State is forced to subsidize that nuke. so it can be available.
When given the choice on least cost, low bidder, policy choices the lobbyists for the high cost choices won out most of the time with the green deciders. That’s why you have statements and claims by the solar associations touting jobs in an otherwise labor saving sector where low bidder utility scale projects are one fourth the cost per watt LCOE of rooftop solar. Where else in the energy sector do you have such disparity of price and cost other than a few special, insignificant situations. Throw in anti-competitive local content rules in Ontario, India, and others and you have policy-driven cost escalation and lost-cost producers exiting the artificial economy.
Windmills and industrial solar can’t do the job of powering the world by themselves. They need sufficient backup to supply 100 percent of electricity requirements.
If we need to build backups equal to the windmill and solar capacity, then what’s the point of using windmills and solar, we should just use the backups all the time. The birds and bats and other living things will thank us for it.
‘then what’s the point of using windmills and solar, we should just use the backups all the time.’
No because they are not sustainable energy sources in that we are consuming them faster than they are being produced. We have a moral obligation to make our society more sustainable – a moral duty to future generations. We’re not morally obliged to shutdown our economy (aka The Green Raw Deal) for future generations but we are obliged, I believe, to try to become more sustainable insofar as we can.
Sustainable is an elastic weasel word. It simply means population levels of the late stone age.
Quaint.
Yes, and wait for the panic heads when the latte-sipping hipsters get that message – the hard wad.
Preferably, through brown- and blackouts routed through their gentrified ‘nabes (or ‘hoods, or whatever they call them these days).
Sorry, was editing this from “exploding heads”.
For “panic heads”, read “panic”…
bonbon – bizarre reply. I never touched on the issue of population levels and constantly challenge anyone who says that the world is overpopulated to give a scientific basis for such a statement – none have ever done so. We know what sustainable means and we also know we have a moral obligation to strive for it – regardless of population levels. What the ‘correct’ population level of the earth is I have no idea but am open to it being much less than the current level or much greater than it – demographics in a shrinking population are a time bomb and one that many Western countries are going to face in a real way in the coming decades.
It is not bizarre – the Schumacher “Small is Beautiful” sustainable mantra means exactly that – stone-age population densities. Even arch de-carbonizer Dr. Schellnhuber CBE is quite clear about it – it means 1 billion population.
When one hears from “The Elders” (recent post here at WUWT) – check founder Branson billionaire and their “global village” mantra.
A sustainable global village of max. 1 billion in regional tribes.
Our species has nothing to do with primates who never exceeded 10 million specimens.
And the use of Carbon has a major part to play – fire.
Notice the attempt to remove fire (and nuclear is fire) with the GND? Shades of Zeus attack on Prometheus.
“Sustainable” means monkeying about with our species. And some think it’s only a word.
No we do not have a Moral Obligation to make our society more sustainable.
We have have the obligation to provide as much energy as cheaply as possible to provide food, clean water, medicine etc.
When those finite energy supplies run out in a couple of hundred years we can shift exclusively to Nuclear.
But the societies need to be technically advanced and rich to do so.
You do not get there by handicapping your energy supply with Wind & Solar.
Unreliable energy sources that require backup from hydrocarbon sources are not sustainable.
“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.”
Rather big misinterpretation if the idea is that the cause is wind and solar energy in the case of Denmark.
If you read your own link you would see that Denmark has a low electricity price before taxes are added. Taxes on electricity are much higher than other types of energy like coal, gas etc for home heating. (see last graph. https://www.danskenergi.dk/fakta-fokus/vaerd-vide-om-el) (Dansk Energi is the Danish Energy Producers interest group)
Danish taxes on electricity are old and have their start with the oil crisis of 1979. High taxes generate an incentive to more efficient use of power which reduces energy needs and lower dependency of oil/coal imports.
A major reason for higher energy prices due to installed wind and solar (at least here in the U.S.) is the regulatory structure. Electric utilities are guaranteed a return on investment by their state regulators because they are regulated as monopolies. So, if the regulators can be convinced that a solar installation in Minnesota makes sense to approve they will then also approve a revision to the rate structure that allows the utility to recover all the costs of the installation, plus a modest profit margin.
Plus, when the regulators hear that the cost of solar and wind power installations are plunging, they’re inclined to approve adding them to the grid, especially if they’ve already approved more expensive solar/wind installations in the past. To do otherwise would be to admit the previous approvals were mistakes.
In the end, due to the need for backup installations, the utilities need more capital equipment than they would need if they’d have avoided wind and solar altogether, but why should they care? They just earn a modest guaranteed profit on that higher level of capital equipment. In other words, the companies do better financially even as they’re forced to raise rates on their customers.
The task is to educate the customers to create the equivalent of the French “yellow jackets.” The regulators and the utility companies are already fully aware of the fraud. They just have no incentive to care.
I think the most powerful graph from a layman’s (i.e., a potential yellow jacket’s) standpoint is the one that shows that the price of electricity to the consumer is much higher in countries that have gone whole hog into solar and wind, and much lower in countries that have reliable base load power from fossil fuels and nuclear. Also, the stop/go analogy presented in the above comments by davidmhoffer would be easily understood by most consumers. In combination, those two points would make an excellent presentation to most consumers. First the facts (prices vary with installed wind and solar) and then the reason (the need for, and misuse of, backup power sources).
I’m not advocating a replay of the French riots here, but angry consumers, if informed, can carry a lot of weight, especially if they start showing up in droves to regulatory hearings.
It’s actually just a tad worse than that. The energy companies in regulated markets are always looking for ways to justify installing capital intense projects – that is the only way they can return dividends. If it were possible they would install equipment that will break in 5 years and reinstall the same junk just to pass on a rate hike.
ERCOT recently declined to expand their grid further to add more wind from the panhandle because it would’t help actual customers. We need more of that sort of decision. “You want to make money by lowering costs? Sure, go for it. You want to make more money by raising costs? Hard Pass.”
Alliant Energy in Iowa just announced a 25% rate increase in order to deliver cheaper electricity generated by more windmills. I kid you not, that’s basically how they spun it. No surprise local journalism wasn’t bright enough to do a, “wait…what?”
“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.”
Duh.
In other shocking news, water is wet.
It’s really very simple why renewables wind and solar have led to greater prices : these power generators CANNOT replace reliable power generators, because they require backup, which means that the power generation capacity must be DUPLICATED. Power genertaion capacity costs are NOT simply fuel costs, quite the opposite – power generators on standby as backup generators costs a lot of money to maintain and operate , regardless of whether they actually are caled upon to produce power : there are the personnel costs, the property tax costs, the maintenance of the generator facility, the money invested in that facility, etc etc. In the case of a nuclear plant, just about the smallest cost component is the fuel – it only costs about 3/4th of a cent per kilowatt hour. And, what’s more, since a nuclear plant cannot ramp power up and down rapidly, it won’t even save any fuel if not called upon to produce backup power even if some portion of its capacity is on standby
Every article I’ve read comparing the cost of solar and wind, with fossil fuels use something called “levelized costs”, which are not actual costs. The articles don’t actually acknowledge this, of course. But if you click on the paper or report cited, you will see that this is the case every time.
What are levelized costs? They are whatever you want them to be. They are imaginary numbers made up to bolster the propaganda.
How does this work? You take the actual costs of fossil fuels and add in X number billions of dollars of “estimated” costs related to damages caused by the evil CO2.
Cherry picking data points and sources is always misleading. The relationship between price of electricity and percentage of renewables is far less clear than the author’s analysis indicates.
Let’s just look at the United States, where there is tremendous variability in percentage of electricity generated by renewables as well as in utility rates, but all are under US Federal laws and regulations, and all 50 states have exactly the same general economic systems (regulated but largely free market capitalism).
I used the 2017 data for electrical retail rates for all 50 states as well as the 2017 data for percentages of renewables, not including hydropower for all 50 states. I used cohorts to make differences more readily apparent, and so summarized data for the top 10 states for percent renewables, which ranged from 46.1% to 21.8% non-hydro renewables (including in order from highest to lowest, Maine, Vermont, Iowa, Kansas, Oklahoma, South Dakota, North Dakota, California, Minnesota, Idaho).
And then I also summarized data from the 10 lowest renewables states from lowest to highest (Kentucky, Tennessee, Delaware, Ohio, West Virginia, Florida, Arkansas, Missouri, Alabama, Mississippi).
The numbers are as follows:
US average electricity rate: 10.54 cents per kw-hour
Top ten renewables average electricity rate: 10.93
Top ten renewables average% non-hydro renewables: 32.1%
Bottom ten renewables average electicity rate: 9.54
Bottom ten renewables average % non-hydro renewables: 2.06%
Difference between top ten renewables and national average electricity rate: 0.39 (3.7%) higher’
Difference between bottom ten renewables and national average electricity rate: 1.00 (9.47% lower)
Difference between top ten and bottom ten renewables average electricity rate: 1.39 (14.6% higher)
I noted also the very wide variation in pricing within these two cohorts, resulting in Standard Deviation values of 2.57 in the top ten and 0.84 in the bottom ten.
Another way to compare is by looking at the two very largest states in population, California and Texas, which have very different environmental laws, obviously.
California has one of the higher electricity rates in the nation at 16.14 cents/kw-hr (8th highest), and one of the higher non-hydro renewables percentages at 26.5% (8th highest).
While Texas, which does not fall into either the top ten or bottom ten renewables, at 15.6% is 14th highest in renewables, yet also has 8th lowest electricity rates at 8.56.
Bottom line is that in general, the US states with the highest renewables percentages – which are rather high, actually, averaging over 32% – do pay slightly higher electricity rates than the states with the lowest renewables percentages … but still well within the standard deviation of the rates per their own cohort of renewable percentages.
This comparison suggests that whether a state has high or low renewables percentages, the effect on electricity rates paid is rather small (less than 15% between highest and lowest cohorts), and that other factors – such as California’s very heavy air pollution regulatory scheme as compared to Texas’ very light air pollution regulatory scheme – seem to matter a lot more than do renewables percentages.
A comparison between US states is also a much more “apples to apples” comparison than any comparison between nations that have entirely different governmental structures, tax rates, economies, and customs that make apples to apples a very difficult comparison to achieve.
What happens when you compare electricity costs pre- renewables in those states with present costs ?
I live in one of the “top” 10 states … consumer costs have risen more than 20% in the last few years .
Right along with penetration from “cheap” wind and solar .
Here’s another new solar project, with 15 hours worth of storage and 24 hour capacity…
https://cleantechnica.com/2019/03/28/acwa-power-announces-financial-closure-for-950-megawatt-dubai-solar-project/
…and here’s some magic beans, Griff…
Interesting,
And if it is anything like Ivanpah in the Mojave area, it will produce usable power from the sun around 50% of the time and require a Gas Powered backup to maintain the necessary heat at night.
The 950 MW Concentrated Solar plant is really a 700MW Concentrated solar (1-100MW and 3-200MW) and a 250MW PV solar project to recharge the back up power system.
In all likelihood the 15 hour back-up planned is because they have looked at Ivanpah and realize their scheme will produce usable power 9 – 12 hours per day.
The current Solar PV measures 2 mi x 2.5 mi for 213 Mw with pland to develop up to 5000 Mw. 5000 Mw would take 20 times the space or about 100 square miles for PV.
OR you could produce the same ammount of energy 24/7/365 from 5 – 1000 Mw Nuclear Reactors on 25 acres. with no gas back-up and not a chance of grid intermittancy
So, it hasn’t been built yet?
That project doesn’t actually exist.
Contrast that with Ivanpah which does actually exist per the terms of the contract it signed with the state of California, should have been closed and shuttered long ago.
Mohammed bin Rashid Al Maktoum Solar Park
Plug this into Google Earth and you will see just what is there as of Jan 2019
2 x 2.5 miles block of Solar PV
If Solar And Wind Are So Cheap, Why Are They Making Electricity So Expensive?
Because they only supply electricity intermittently. Therefore you must also invest in another source of reliable electricity for when the wind doesn’t blow and the sun doesn’t shine. So you could have simply produced electricity from that reliable source, and saved the investment in wind and solar.
Example: South Australia just a few years ago had coal and gas generation and prices were $60/MWhr. SA now has 1900 MW nameplate wind generation with demand varying from 1000-2500 MW, backed up by gas and diesel generators. So duplicate investments, current wholesale price $116/MWhr.
Robber,
Yes, the cost comparison that matters compares what it would have been without renewables, with what it has become with renewables.
In rough terms, Australia could be $40 a unit instead of $90. If only we had not changed to main producers in the mix.
Nothing except ideology is preventing a return to the good times.
You might think that is too gross, to general, to shallow, but after decades in the business I bet I can beat you down on any point you raise.
Doers usually outrun believers in challenges like that.
The Problem with ‘Take or Pay’
http://www.world-nuclear.org/information-library/country-profiles/countries-t-z/usa-nuclear-power.aspx
A second problem is the federal production tax credit of $23/MWh paid to wind generators, coupled with their priority access to the grid. When there is oversupply, wind output is taken preferentially. Capacity payments can offset losses to some extent, but where market prices are around $35-$40/MWh, nuclear plants are struggling. According to Exelon, the main operator of merchant plants and a strong supporter of competitive wholesale electricity markets, low prices due to gas competition are survivable, but the subsidized wind is not. In 2016 the subsidy (production tax credit) is $23/MWh. Though wind is a very small part of the supply, and is limited or unavailable most of the time, its effect on electricity prices and the viability of base-load generators “is huge”.
“In der Tat profitieren die Anführer der Kernenergie (Illinois, Frankreich, Schweden und Südkorea) vom weltweit günstigsten Strom.”
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in France the gilets jaunes protest because Macron wants to force his fellow citoyens by increased fuel prices to dispense with the use of ICE-powered vehicles that these fellow citoyens need to go to work.
At the same time, he has to make energy consumption even more expensive in order to deliver this “cheaper, eco-friendly energy”.
sacrément Accord Parisienne.