Renewable energy is so cheap, it is pushing out coal and natural gas generation even without subsidies. (Don’t forget that coal and gas are heavily subsidized and always have been, a dirty little secret both industries prefer not to talk about.) That’s the view of Bloomberg New Energy Finance, which says in its latest report that the Levelized Cost Of Electricity for lithium-ion batteries has fallen dramatically since the first half of 2018.
BNEF says the LCOE for battery storage has dropped 35% to $187 per megawatt hour in the past year. During the same time period, the LCOE for offshore wind has plummeted by 24%. Onshore wind and photovoltaic solar have also gotten cheaper, with the LCOE of each now at $50 and $57 per megawatt-hour for projects starting construction in early 2019. That’s down 10% and 18% respectively compared to a year ago.
Elena Giannakopoulou, head of energy economics at BNEF, says “Looking back over this decade, there have been staggering improvements in the cost-competitiveness of these low-carbon options, thanks to technology innovation, economies of scale, stiff price competition and manufacturing experience.
“Our analysis shows that the LCOE per megawatt-hour for onshore wind, solar PV and offshore wind have fallen by 49%, 84% and 56% respectively since 2010. That for lithium-ion battery storage has dropped by 76% since 2012, based on recent project costs and historical battery pack prices.”
Tifenn Brandily, energy economics analyst at BNEF, adds “Solar PV and onshore wind have won the race to be the cheapest sources of new ‘bulk generation’ in most countries, but the encroachment of clean technologies is now going well beyond that, threatening the balancing role that gas-fired plant operators, in particular, have been hoping to play.” Offshore wind now costs less than $100 per megawatt-hour compared to $220 just five years ago.
Giannakopoulou said: “The low prices promised by offshore wind tenders throughout Europe are now materializing, with several high-profile projects reaching financial close in recent months. Its cost decline in the last six months is the sharpest we have seen for any technology.”
BNEF’s analysis is based on information on real projects starting construction and proprietary pricing information from suppliers. Its database covers nearly 7,000 projects across 20 technologies (including the various types of coal, gas and nuclear generation as well as renewables), situated in 46 countries around the world. LCOE measures the all-in expense of producing a MWh of electricity from a new project, taking into account the costs of development, construction and equipment, financing, feedstock, operation, and maintenance.
FUD From University of Chicago
A new study from the University of Chicago starts off with this headline: “EPIC study finds state-level programs upped electricity prices as much as 17%.” Wow. Why on Earth would anyone want to pay more for electricity? What in the name of John Jacob Jingleheimer Schmidt is going on here? Let’s take a closer look at that study.
The study is co-authored by Michael Greenstone, the Milton Friedman Distinguished Service Professor in Economics and director of the Energy Policy Institute at the University of Chicago. “This study joins a growing body of evidence that demonstrates that when climate policies favor particular technologies or target something other than the real enemy — carbon emissions — the result is less effective and more expensive than is necessary. In contrast, the global experiences from carbon markets and taxes make clear that much less expensive ways to reduce CO2 are available right now.”
Anyone who hears echoes of the familiar refrain “government should not be in the business of picking winners and losers” in that statement gets a gold star.
Now the fun begins. “Greenstone and co-author Ishan Nath from the University of Chicago compared states with and without RPS policies, using the most comprehensive dataset compiled to date. They found that RPS programs, which currently cover 64 percent of the electricity sold in the United States, significantly increased retail electricity prices—with prices rising by 11 percent seven years after the policy became law and 17 percent 12 years afterward.”
Are you getting this? Electricity prices are higher than they were 12 years ago and it is all the fault of renewable energy standards! Quick. We must run and tell the king! People in those 29 states have paid “$125.2 billion more for electricity than they would have in the absence of the policy,” the authors contend. Gee. And nobody has gone to jail for this outrage? Incroyable!
The authors contend that each ton of carbon dioxide avoided by renewable energy standards costs as much as $460 per metric ton. They indicate that $5 as called for by the Regional Greenhouse Gas Initiative in the northeast or the $15 imposed by California’s cap-and-trade system are numbers the business community could live with. That’s certainly true, provided businesses accept that most of their customers will be dead within a relatively short period of time.
The authors conclude with this statement: “The study explains that RPS policies raise electricity prices more than previously thought, because several hidden costs have typically been ignored: 1) The intermittent nature of renewables means that back-up capacity must be added; 2) since renewable sources take up a lot of physical space, are geographically dispersed and are frequently located away from population centers, they require the addition of substantial transmission infrastructure; and 3) by mandating an increase in renewable power, baseload generation is prematurely displaced, and some of the cost is passed to consumers.”
So the cost of transmission infrastructure gives renewables a black eye, huh? Have you ever heard anyone complain about the cost of building transmission lines from the Navajo Generating Station or Hoover Dam to Arizona, Nevada, or California? And the world should wait to pursue zero emissions power until all the coal plants on Earth have reached their theoretical useful life? What kind of nonsense is this?
Enter The Heartland Institute
The Greenstone-Nath report is front page news at the Heartland Institute, the Koch Brothers mouthpiece that spews out research for a fee, making damn sure the results always align with the twisted agenda of two of history’s most dangerous fiends. Here’s how the process works. If Heartland produces studies that support the Koch’s nefarious agenda, it is handsomely rewarded. If not, it goes out of business.
It’s the same dynamic that converts the Republicans in Congress into helpless eunuchs. If they vote the Koch party line, they get reelected. If they don’t, the Kochs replace them with someone who will. There’s a name for people who sell their bodies for money and its applies equally to those who sell their brains and their souls for 30 pieces of silver or the modern day equivalent.
The Vehicle Emissions Analogy
Those fun folks at the Heartless Institute love to sing from the same song book. A few years ago, they had the cajones to tell the world that new cars cost more because of federal fuel economy standards. They did not cost more because of 17-way power seats, 27-speaker audio systems, leather interiors, navigation systems, adaptive cruise control, forward emergency braking, dashboard mounted touchscreens, or any one of a hundred new features new car buyers suddenly decided they couldn’t live without.
Nope, every penny increase in the cost of new cars was because of those damned fuel economy standards rammed down the throats of poor car companies who were unable to build the cars they really wanted to build because of burdensome government regulations. If you believe that tripe, I have stock in a new geoengineering startup I’d be willing to sell you for the bargain basement price of just $100 a share.
It Would Be Funny If It Wasn’t So Sad
Such specious reasoning and flawed analysis would be laughable if it didn’t have such dire consequences. Rest assured that a copy of the U of Chicago study is on the desk of every Republican in Congress and in state legislatures around the country. Want to keep getting campaign contributions from the Koch Brothers? Parrot what’s in this report or we will castrate you in the next election.
Be on the alert for op-ed pieces and flowery speeches from the geldings in the Republican party telling us why renewable energy is bad for America. But now that you know the truth, you are empowered and can refuse to vote for shithole politicians in the next election.
In the end, renewables won’t save the world. Forthright, forward-looking leaders who are willing to invest the time and effort in programs like the Green New Deal will be needed to prevent human extinction. Business as usual approaches will condemn us all, our families, and friends to shorter, less healthy lives. What possible explanation could there be for continuing to support people who lie to our faces and dare us to do anything about it? It’s your vote. Use it wisely.