Plunging costs make solar, wind and battery storage cheaper than coal | Hacker News Reader

Plunging costs make solar, wind and battery storage cheaper than coal

reneweconomy.com.au

478 pointstim333204 comments

Notable: "And these prices do not represent just a few one-off, left field offers. All told, there were more than 100 bids combining wind and solar, or both, with battery storage, and 20 gigawatts of such capacity.

The “median” means that half the bids were cheaper than the median price cited above."

I realize most readers of HN know what a median is, but the fact that this was not just the lowest bid in each group was worth highlighting.

This appears to have come before the recent 30% Solar panel import tariff. Can anybody else confirm that the bids that include solar would not be possible today?

These bids are for projects that go into service by 2023.

It's extremely unlikely that this tariff will last even two years. Similarly enacted section 201 tariffs get squashed the next time the WTO considers them. If, by some implausible and disastrous series of events we are taken into a trade war and the current tariffs stand, they decrease by 5% each year, to 10%.

So its safe to say that they will have as little impact on the bids 5 years from now as they do on increasing US manufacturing.

Also worth noting that even a 30% tariff on panels just makes them cost about what they did in 2015. It does nothing to the other significant costs of solar tech - inverters, supporting structures, land, installation labor.

At worst it will delay solar adoption by a couple of years.

I am no economist, but the tariff could end up accelerating the decrease in prices as the foreign producers have a steeper gradient to overcome. If they are indeed dumping at below cost, they could also respond by lowering prices by the tariff amount.

If the tariff is applied to foreign assembled units, they could onshore the final assembly. Or start bundling non-tariffed systems so they are still cheaper in the end.

I could envision a cargo container with the panels and strandbeest-accordian support structure, plant on end in the ground and it would automatically unfurl (high school bleachers but with an alternating Z pattern) as the container moves along. Even with a lower pack density, deployment in hours would save the overall system cost.

[0] https://en.wikipedia.org/wiki/Theo_Jansen

The proposed tariff allows for only 2.5GW of cell imports that are assembled into full modules in the US. Manufacturers are already lining up to see who is going to be allowed to get into that small quota.

Given that it's going to take a bare minimum of 18 months and probably several years to build a new cell manufacturing facility, and the length of life of such a facility, somebody looking at building new capacity would get a year or two of tariff protection, and then have to survive another few decades without it.

And prices continue to drop precipitously. Given the tariff phase out, the market will probably return to 2017 equivalent in short order, and then continue to get cheaper in spite of the tariffs.

Does this include wear and tear and replacement costs on the battery storage cells?

Yes. These bids are usually for a "power purchase agreement", which is a bid to deliver X amount of power over some period of time. All of the maintenance, fuel, wear/replacement costs are included with the bid since it's just a raw end power delivery contract.

The interesting thing that's new about this is that these bids are for "dispatchable" renewables. Up until this point, most renewables were not dispatchable since they didn't have cost competitive storage. This means that renewables now can bid for much higher levels of grid penetration in capacity markets.

Note that coal is also not a dispatchable power source. Mostly they're base load plants [1], best case they're load following power plants [2]. No way for them to respond quickly to demand changes like natural gas, hydroelectric, or batteries can.

[1] https://en.wikipedia.org/wiki/Base_load

[2] https://en.wikipedia.org/wiki/Load_following_power_plant#Coa...

One last reference, these are in contrast to peaker power plants [3] which can quickly start up and shut down as needed to cover high demand periods. Gas, hydro, and grid tied batteries fit into this category.

At least in the US, the grid runs as a market where as demand rises, plants bid their price to meet the demand. The energy price that they charge for these peaks is substantially higher than the base load price because you have to build enough power plants to meet the highest demand (else you get brownouts) and the peaker plants are only going to run for a small fraction of the time. The price they charge for that small time still has to cover all of the infrastructure cost.

Since the peak energy price is so high, that makes a good opportunity for batteries to jump in. Tesla's recent Australian battery project is a great showcase of that.

[3] https://en.wikipedia.org/wiki/Peaking_power_plant

Thanks for the pointer, I would not have caught that

Within the last ten years we've had solar and wind getting below retail rate of grid electricity, then getting below wholesale rate, now below wholesale rate including storage. There aren't too many 'yes, but...' issues which are left to prevent these technologies actually taking over on a pure cost basis. That is, even if you assumed climate change is a hoax, which is incorrect, the alternative technologies are still better.

I suppose one issue is the length of storage, in the article the ranges they mention are 4-10 hours, I would have thought wind would be variable enough to require longer term storage to guarantee power output, not so certain about solar in Colorado? Presumably the percentage of storage needed would vary a lot depending on the local microclimate. That presumably will be a wrinkle holding up adoption.

Yes, but...this is the case just for the first-order cost basis. The supply of raw battery materials (e.g. Cobalt) is limited in price and quantity. If we don't invent new battery technologies, we don't have sufficient accessible supply of raw resources.

I also wonder how mid term artificial manipulations to the market of these components (i.e. China subsidizing solar cells, America adding tariffs) will keep us on a general decline in solar power costs.

I'm dubious about the resource point, because prospecting and mining are demand-driven. These kind of resource crunches are happening all the time with new technologies. Supply will follow demand, that may even lower prices with new discoveries or technologies. Even if the price has to go up massively to open up new sources, how many orders of magnitude increase would be required to make a dent in the overall cost of a battery for Cobalt? And then, even if there is a serious hard limit there are plenty of alternatives. You can use multiple other materials as an in-place replacement for Cobalt in Lithium batteries, and there are lots of other fundamentally different battery and storage technologies which work using different materials and principles, which have other resource requirements. The peak Lithium or peak Cobalt idea seems quite similar to peak oil, which was sort of right (in the sense of conventional oil) but in a way which turned out not to be especially relevant.

No problem with being skeptical and typically supply will follow demand, however there are a couple of important things to note when it comes to Cobalt.

Most cobalt is produced as a result of other extraction activities, it is rarely the primary resource. Normally it's in found/produced in conjunction with Copper and Nickel mines. This has a number of repercussions which would take too long to detail here, however to get more Nickel on stream would require either increasing capacity at existing operations, which may or may not be a non-trivial task or a combination of exploring/designing/procuring/operating a new Cobalt asset which is never non-trivial. The result is, there will always be a significant lag between market demand and output capacity creating sudden spikes in price, a surge in investment activity and then eventual stabilization of price once assets start producing.

Most of the worlds known reserves (identified resource which may or may not be economical to extract) for Cobalt come from the the Democratic Republic of Congo, which for the purposes of this discussion can be said to have reserves an estimated order of magnitude over anyone else. In response to growing demand the DRC have raised taxes on Cobalt as recent as a few weeks ago. A number of operations have been sold to Chinese companies in recent years, shoring up their supply chains. It almost goes without saying that a number of these operations have terrible human/labor rights issues and track records.

We've all managed to come to terms with our cognitive dissonance of driving cars and drinking out of plastic bottles when it comes to Oil, but how will everyone feel about funding the DRC in the name of progress?

> but how will everyone feel about funding the DRC in the name of progress?

By 2015, DRC supplied 60% of the world production of 32,000 tons at prices of $20,000 to $26,000 per ton[1]

That's about $750,000,000.

So the question is: how do you feel about it now?

1. https://en.wikipedia.org/wiki/Cobalt#Production

Stationary storage is a lot more flexible in what chemistries they can use because they don't need to optimize for mass. The article even mentions one bidder offering redox flow batteries which have scaling properties which are much better for grid storage than for cars, so they wouldn't compete for resources with the latter.

Yeah Alphabet have project Malta [0]

[0]: https://x.company/explorations/malta/

I'm super curious about how the storage market will develop. Renewables as a whole have been competing on the open market with other sources of energy for a long while now, and competitive pressures have been driving innovation and bringing down price there for a bit, but renewables + storage are still (relatively) new as a significant market player, and my (admittedly naive) impression is that while renewable energy providers are starting to bid on projects and incorporating storage, there's room for a serious second-order market of different storage technologies competing for renewable providers' business that's only just getting off the ground.

Seems like there's still a lot of room for innovation there. Certainly there are startups exploring variations in this space (lithium ion, but also flow batteries, pumped hydro, compressed air, flywheels, etc., etc.), but I don't think any of them have realized the economies of scale necessary to be competitive yet. No reason they can't though.

Plenty of alternate battery techs around, especially for stationary storage. Flow batteries[1] are commercially available now, are price competitive and don't require rare earths.

[1] https://en.wikipedia.org/wiki/Flow_battery

We live in a strange time where our access to clean power is limited not by technology or product cost but by politics, dedicated lobbying dollars and the entrenched old guard in federal but more importantly state and local level government.

I'm still waiting on my clean coal...

Not really. It's not like we have a trillion solar panels near the surface that we simply have to dig up. Coal is only alive, because the infrastructure is all there, and it's profitable. The mines are there, the electric plants are there, they are connected to the grid, etc.

Solar panels and batteries are not there, they need to be manufactured, transported from China, land needs to be bought, then they have to be installed. New fabs need to be built to match the increasing demand.

All of the above is true. But coal is also alive because of the way the EPA was politically forced into classifying coal ash as solid waste as opposed to toxic. This has amplified the negative affects of coal residuals a hundred fold. It has also made it increasingly difficult to regulate as well as made it easier for state and local politicians to defend. This started decades ago

The epa provides guidelines on coal ash storage but does not have the power to enforce them. This power falls to the local level and is expected to be enforced via citizen lawsuits. Some state politicians are working hard to prevent even this.

http://www.thestate.com/news/politics-government/politics-co...

This is directly a result of lobbyists and campaign contributions.

While favorably classifying waste certainly helps the coal industry I'm not getting on the "more federal power will solve this" bandwagon.

We'd also have a lot more wind farms if it weren't for environmental regulations. A group of people with money can stall a project by taking them to court over environmental impact and compliance with regulation.

What justification is there to simply sidestep certain classes of solution that have worked just fine in the past? Federal environmental regulation worked pretty to curtail many wide-scale human pollution problems - acid rain, water pollution, and ozone depleting chemicals, just to name a few. The only real reason to not solve it federally is political capture by entrenched capital.

I don't understand, you seem to be drawing a false equivalence between any sorts of government action.

Claim: "Campaign lobbyists are giving coal an extra advantage by helping coal dodge regulations." Your response: "We would have more wind farms if it weren't for bad regulations."

These two claims seem like two ships passing in the night. I agree with both of them.

So are you saying that the conservatives have it all wrong when they say that coal in the US would be healthy if if it were not for the actions of the federal government?

Solar has a barely positive EROI. When all costs are considered it typically uses more energy than it produces. This has been studied extensively in multiple European countries.

http://energyskeptic.com/2018/solar-pv-has-a-net-energy-loss...

These articles making claims to the contrary basically don't make any sense. If solar panels and wind farms resulted in large amounts of cheap energy they would be going up at a massive rate. We have a relatively free economy. Utilities and entrepreneurs would be going nuts building the things. Instead they only exist as tax scams anywhere in the industrialized world. Use your head, people.

That article you link to is based on the Ferroni and Hopkirk 2016 paper, but that has been discredited somewhat, I believe.

The paper below revised the EROI figure from 0.8 to around 8.0.

https://www.sciencedirect.com/science/article/pii/S030142151...

"Looking at the bulk of the research, it’s more likely that solar panels, over their lifetime, generate 10-15 times as much energy as it takes to produce them and their associated hardware. That number may be as high as 25. And it’s rising over time." http://rameznaam.com/2015/06/04/whats-the-eroi-of-solar/

There's also the fundamental mistake that not all energy is equal.

Energy in the form of electricity is far more useful than energy in other forms as it can be used directly. With other forms it will generally need to be converted first, with massive efficiency losses which are ignored by EROEI proponents.

So for example while oil might be said to have an EROEI of 14.5, it loses 80% of that when used for the common purpose of turning a cars wheels, giving only a 2.9. generally those who quote EROEI numbers would claim this makes industrial society a literal impossibility.

All analysis I've seen indicates pretty much the opposite. Electricity is way less useful than diesel fuel. Our civilization critically runs on diesel and no one has figured out an even theoretically viable way to substitute in batteries where diesel is used in logistics, resource extraction, and pumping.

These claims are based on simplistic spread sheet models. We have REAL WORLD DATA. The real world experience throughout europe and the USA shows net losses. I repeat: if it worked the plants would be profitable and they would be going up without tax subsidies. Do you dispute this? Does the legal environment somehow prevent entrepreneurs throughout the western world from selling solar power into the grid?

If you think tax subsidies have anything to do with EROI (i.e. EROEI) you are very confused. This is calculated on the basis of Wh/Wh. Simple dimensional analysis shows that $ doesn't show up at all in the calculation.

Of course tax subsidies are useful to bootstrap on a $ cost basis, but with current costs and rate of falling costs even that will soon become unnecessary (let's get rid of fossil fuel subsidies to make this "real world data" comparison fair though).

Cash flows are in fact a reasonable proxy for energy in many cases. Manually tallying up the uses of energy and materials is a handwaving exercise at best, but net losses of cash in the energy industry indicate with certainty that you not yielding net energy to society as an enterprise.

Can you review this [1] and ELI5 why solar seems to work in China, but the Sun doesn't shine enough to make the economics work in the west according to your research?

[1] https://en.wikipedia.org/wiki/Solar_power_in_China

> if it worked the plants would be profitable and they would be going up without tax subsidies.

No, it's the other way around: fossil fuels are subsidized by governments to the tune of $4.8 trillion a year, so solar needs to be subsidized as well to be able to compete.

http://www.imf.org/external/pubs/cat/longres.aspx?sk=42940.0

> they would be going up without tax subsidies.

They don't even build Walmarts without tax subsidies these days.

Can you link real world data?

Are externalities (CO2 output) taken into considerations in your unsourced REAL WORLD DATA!!~!

> I repeat: if it worked the plants would be profitable and they would be going up without tax subsidies

Right, so on that basis these bids below the grid rate indicate that they now work?

Bids are speculations.

Bidders are very frequently unable to actually deliver. See pretty much any highway project ever.

Agreed on that.

Nothing prevents anybody from selling solar power. Lots of solar farms are live and many more are being built.

https://en.wikipedia.org/wiki/List_of_photovoltaic_power_sta...

(note how the biggest ones are all new)

I would have bought a house without a tax subsidy.

But there is one, so I'm sure as hell taking it.

It used to be that solar panels never paid for themselves, then it was 20 years to break even. Now, I think, we're down to 5 years.

Solar panels are getting cheaper and cheaper, and they definitely have a positive ROI now. And there are huge solar farms being built all over the world. I'm pretty sure they did the math before investing millions of dollars.

If you can highlight a plant that is not a "tax farm" I would be interested to read about it.

"we get a tax credit if we build a lot of wind farms. That's the only reason to build them. They don't make sense without the tax credit." --Warren Buffet

This illustrates the reality of every "renewable" facility I've heard of to date. If the business case has changed just now, that's great and I look forward to the future. But most of what I've seen has been very silly industry propaganda.

Some areas have produced cheaper energy without subsidies as far as 2014. See pages 2-4. It's way better now, since the solar prices went down so much.

https://www.deutschebank.nl/nl/docs/Solar_-_2014_Outlook_Let...

And to answer your question about non-tax-farm, I don't know. If the government gives a subsidy, why wouldn't you take it even if you're profitable without it?

Subsidies alone don't prove that the solar farms are not profitable.

Is the 40GW of production in China a "tax farm"? Your argument that "solar is a gimmick because tax subsidies" seems flawed when international counterexamples are considered.

> Is the 40GW of production in China a "tax farm"?

According to everything I can find online the answer is a clear Yes?

What you call a "tax farm" is traditionally called industrial policy, and it has an exceptionally good track record.

It's almost as if initial government investment has allowed the technology to advance to the point that it no longer requires subsidy to be cost effective. Kind of like every other major industrial and technological breakthrough over the last 100 years.

What kind of economics would allow a solar panel manufacturer to spend $301 worth of energy to produce a panel which sells for $300?

The simplest response to this is: they are going up at a massive rate.

To be fair, this is only just happening on a pure cost basis, if this is true it will be new for this year, previously it has only been in countries with high retail rates and high solar output (Italy, Australia, Hawaii etc) where solar plus battery was on the verge of competitive, and even then more on a somewhat hypothetical basis assuming friendly planning laws, access to equipment like a Powerwall which may actually be difficult to get hold of straight away, efficient installation ecosystem, and so on.

The things that we should be criticizing are more about:

i) Failing to acknowledge the transition had to be done regardless of whether it was more expensive, because the result of climate change would be worse

ii) Failing to accept that the cost of these technologies (electric batteries, electric cars plus charging infrastructure, solar, wind) was consistently falling in a way which implied they would become cheaper than current technologies over a period of decades.

iii) Supporting new technologies over the existing technologies, and to what degree to push them over a tipping point quickly. Subsidies and mandates have been completely instrumental to getting to these point, there's no way solar in particular would have scaled up without them. If we are already at or around a tipping point, maybe we will be able to reduce them quickly rather than slowly, but I still think they will be important over the next 5-10 years for making this happen by 2040 rather than 2060.

How does politics prevent electricity companies from building solar plants.

While I agree politics could help enable it more through subsidies. However we are capitalisticish where utilities won't build a coal plant if solar is truly significantly cheaper.

How about by trying to make it illegal for state utilities to sell power generated by alternative energy?

https://www.popsci.com/wyoming-is-basically-trying-to-outlaw...

Many politicians place a very high value on the opinions of their major campaign contributors. Many of those contributions come from established coal based power companies.

In America a lot is being done to actively discourage anything but CNG and coal. Montana is literally crippling their economic growth to keep coal and CNG producers and burners happy and the US is raising tarrifs on solar panels and components to further damage a market that has already been under constant, pointless regulatory assault.

Strangely enough, installation in the US is a lot more expensive than it is in Germany and most other countries with a significant installed base of solar, even once you ignore subsidies. And according to something I read from the US Dept of Energy, one of the big reasons for that is reckoned to be over-regulation. That's because each US state has complicated, separate laws for permitting, attachment to the grid, and so on, whereas Germany has a unified regulatory system which allows installers to get decent economies of scale.

The US has all sorts of odd subsidies and issues of regulatory capture like this, I'm thinking also the corn subsidies, and the block on buying cars direct from retailers. It's ironic that all of that happens despite all of the vastly stronger rhetoric about cutting regulations. In my opinion it's another indication that a 'starve the beast' approach to government is not effective even on its own terms. To actually get rid of specific bad policy you have to campaign against those measures specifically, and have people in government who are acting in your interests, you can't just rely on a general anti-government government.

Good point about regulation. I am from Norway but have lived in the US. My impression is that regulation and bureachracy tends to be overly complicated in the US, while usually much simpler in Norway.

This happens despite Norwegians generally being positive to government and regulations while Americans seem knee-jerk anti anything government.

To get simple and good regulation I think you need an effective government and a belief in government. In Norway you can enact large and broad reforms and regulations, while in the US everything seems peacemeal.

Take welfare or healthcare. The US has a huge patchwork of small programs and minor regulations. This is due in part because of a reluctance towards broad but simple government programs like single payer.

A government can set standards for data exchange and bills e.g. which is why prescription can be sent from my doctor electronically to all pharmacies in Norway.

To be fair, Norwegians might be more anti anything government if the Norwegian regulatory system was as Byzantine as in the US.

>And according to something I read from the US Dept of Energy, one of the big reasons for that is reckoned to be over-regulation.

Yes. This is non-negligible part of the problem. There's lots of regulation and that plays right into the hand of the incumbents (utility companies) who can use that regulation to make it harder to compete.

And many of these subsidies are actually protective of existing energy industry that wants to enforce connectivity to the grid.

California in particular had a relatively quick plummet in power demand that actually caused older parts of the grid to start breaking. PG&E despite having used negligence to set a bombs with gas line negligence and kill dozens of dogs with electrified ground plates argued they couldn't cut into profitability, and started forcing people to reconnect to the grid even if the customer would exceed the maximum buyback cap PG&E offers (as I understand it, not a homeowner so this specific part is only my reading).

Result is protectionist nonsense that greatly reduces the profit margin of solar for individual installs.

Utilities certainly will build a coal plant when coal subsidies are over 3% of global GDP. That's a huge figure, and hardly capitalist.

https://www.sciencedirect.com/science/article/pii/S0305750X1...

You can see a copy of the report here: https://www.imf.org/external/pubs/ft/wp/2015/wp15105.pdf

It isn't a direct subsidy. They're saying pollution from coal has external costs and there isn't a tax on the coal-burning polluters to pay for this, so in effect coal has a subsidy.

I guess it has a point but I think calling that subsidy is misleading.

Subsidy just implies that someone other than the coal industry is paying for a cost that the industry imposes.

The only time the term subsidy didn't make sense was when we didn't know that these externalities existed. But the moment the costs were clear, not assessing them on the coal industry became a subsidy.

Subsidy suggests someone giving you money, as opposed to not taking your money. These are not the same thing at the margins.

It's a subclass of subsidy known as an "implicit subsidy":

https://en.wikipedia.org/wiki/Subsidy#Environmental_external...

There are assumptions in calling that a subsidy, I identified these two that I have issues with:

1) The net externalities are measurably negative

2) The coal producers should be paying them

There are clear and massive positive externalities to fossil fuel, and anyone arguing otherwise needs to take a deep breath. They are the foundation of modern civilisation, and we all get non-economic benefits from the era of unprecedented peace and prosperity that we live in. If we price in all the externalities, fossil fuels probably do deserve a subsidy. The renewables debate is about whether we have an alternative that is better than the historically magical substances we call fossil fuels.

Since it has a higher EROEI than solar, if we are going to start pricing in externalities I would be comfortable arguing fossil fuels deserves a higher subsidy than solar for positive externalities. I don't think that is sensible, but neither do I accept that there is an 'implicit subsidy'.

The 2nd assumption is a political question that afaik has been answered in the negative. It doesn't make sense to claim that they 'have a subsidy' when the system we use to determine if they should be paying for an externality (currently) accepts that they do not have to.

> They are the foundation of modern civilisation

This sounds like sentimentality. We've found better ways that costs less and have fewer externalized costs. Consistent electricity at the point of use is indifferentiable as to its source. It matters little if coal got us to this point if other technologies can provide cheaper energy in less environmentally harmful ways going forward.

> and we all get non-economic benefits from the era of unprecedented peace and prosperity that we live in

Prosperity is not at risk with the implementation of renewables and storage. The removal of the health costs of coal-generated air pollution will increase quality of life.

> unprecedented peace

What exactly does coal uniquely offer in terms of supporting peace vs other sources? Also, you are conflating coal with all other fossil fuels when it suits your argument. They are not all the same. Natural gas will continue to have use as a heating fuel for a long time, but the same can't be said of coal. It doesn't have a significant use today beyond producing electricity.

What is at risk are jobs in the already long-declining coal extraction, transport, and combustion industries, and the people in the regions that are dependent on those industries should be helped transition in the near term.

> There are clear and massive positive externalities to fossil fuel, and anyone arguing otherwise needs to take a deep breath. They are the foundation of modern civilisation, and we all get non-economic benefits from the era of unprecedented peace and prosperity that we live in. If we price in all the externalities, fossil fuels probably do deserve a subsidy. The renewables debate is about whether we have an alternative that is better than the historically magical substances we call fossil fuels.

I think you'd have to be pulling a pretty long bow to argue that fossil fuel extraction and use has no environmental externalities - this paper for example (http://insight.jbs.cam.ac.uk/2015/measuring-fossil-fuel-hidd...) shows that for 2008-2012 "the implicit subsidy exceeded post-tax profits (averaged over five years) at all 20 of the largest oil, gas and coal producing companies studied".

We're already (globally) subsidising the fossil fuel industry, I think it's only fair to ask for some of that money back - it's not like they would 'unpollute' the sky and sea if they could anyway.

While they may be the foundation of the modern era, fossil fuels are also a dirty relic that should be left in the past. Leaving aside the environment impact I don't think I'd have to argue so hard that they have a not-so-great legacy when it comes to huge injections of capital into the middle east and it's concomitant propping up of dictators and despotic dynasties.

The ability to derive useful energy from coal is not an externality, it is priced into the sale and consumption of the good.

Just for your benefit, an externality is a cost or benefit that is incurred by a party not involved in a transaction.

Cheap energy generates positive externalities. Obviously I'm not talking about the buyer and the seller of the that energy, I'm talking about the social polity at large. There are positives to having large cheap energy reserves, and those positives are absolutely not priced in to the energy market.

Cheap energy is an enabler that frees resources up for other tasks. It is not a reasonable position for someone to pretend that coal is 'implicitly subsidied' because they've picked up on one negative externality and decided that it should be priced in; the net picture needs to be considered. If we were going to price in all the externalities of having such a cheap and convenient but dirty fuel it might well get an actual subsidy, but that would be silly in its own right. This is one of the major reasons why the pro-renewables crowd has such difficulty convincing anyone to price in the environmental impacts.

Sure, if the debate is had and we all decide that a specific negative externality is to be priced in then I've got no leg to stand on and I'll sing a different tune. But governments so far have implicitly accepted that that negative externality should not be priced in.

Agreed. Its interesting too the external costs of not using coal. EG shutting down mines causes a lot of economic hardship in some regions of the US. Is that a subsidy for gas/solar/nuclear?

No. You also do not have standing to sue a company for decreasing the resale value of your property by releasing a new model.

There absolutely can be social utility in remedying structural unemployment, but we are not in an economic system where people have a right to wages for work that is not valuable.

It is a subsidy under our legal system if the industry / plant / miner causes a tort and it's not remedied. That's money going out of one persons pockets into another.

Sure, the term might not be the most appropriate one, but if we are talking about choosing the most effective use of capital to create energy, and one method has negative externalities that are shared by the whole world but are not taxed, and one method does not, then it's much harder for solar to be an attractive option. The market is skewed.

With a very broad definition of subsidy. By this definition roads are subsidy for cars (turns out, Greenpeace agrees with this one! https://www.thebalance.com/government-subsidies-definition-f...)

"Undercharging for global warming accounts for 22% of the subsidy in 2013, air pollution 46%, broader vehicle externalities 13%, supply costs 11%, and general consumer taxes 8%."

Call the negative externality costs whatever you like, but the coal industry doesn't pay it, which makes it seem cheap compared to solar. Which is why this article is news.

how can you possibly say roads are not subsidized for cars? if i wanted to build a railway, and the government built the track for me wouldn't that be a subsidy?

just because the government normally pays for it, doesn't make it somehow not a subsidy.

Ha! Can't tell if trolling or what, but if you want a great example from California look at Panoche Valley. It's a barren wasteland with no crops and little grazing, where the Spanish explorers despaired that they'd entered Hell. But as soon as someone wanted to put a solar power station there, chaos broke out. Even the Sierra Club sued to stop the project. Project eventually got downsized from 250MW to 150MW, and construction has only just started, 10 years into the project.

https://en.wikipedia.org/wiki/Panoche_Valley_Solar_Farm

Many states have put up barriers to rooftop solar, at the behest of local utilities. That's the most common and obvious example.

If politics can help it through subsidies, then it can certainly harm it through opposite means (subsidies of competitors, fees, taxes, tariffs, overregulation like zoning rules, extra requirements or legal liability, etc.).

decreasing prices also reduce an investor's return

if prices keep dropping hugely year after year: investors aren't going to be very willing to risk their capital, as tomorrow's prices might not allow them to recoup their investment

(yeah, futures are the answer, but are presumably expensive if you're talking about decades)

Depends on the rate of return and payback.

Panels only last ~20 years so they need to payback ~5% of the investment + interest in the first year. Assuming costs drop less than ~4% waiting is unlikely to be a net benefit. (Basically, trading 1 year now for 1 year 20 years from now is rarely worth it.)

Further, panels are far from the only cost involved so really waiting is generally not worth it. Which you can see because panels are being used as quickly as they can be manufactured.

Is that true that panels only last for about a couple of decades? A quick google suggests that that's just the warranty period and they just lose about 1% efficiency a year.

This stuff depends on the panel. Panels may still function in 40+ years, but the decreasing power output becomes very significant.

I am more saying losing total output in ~30+ years and ~0.5% to ~1% power output until then is about the same as losing 1 year of power output 20 years from now.

>How does politics prevent electricity companies from building solar plants.

By whacking massive tariffs on imported solar panels.

They pretend it's done for the benefit of American solar manufacturers. It's not. It's done for the benefit of coal and gas. If they just wanted to help American solar manufacturers they'd give them subsidies to offset what they (erroneously) considered "unfair" competition from China.

Let's not forget major wind power states literally making it illegal to compete with gas.

A subsidy is a government cost and likely needs more approvals than A tariff which is a source of income for the government. One was accomplished with executive order while the other would likely have to go through congress.

They did it before with solyndra.

That was before solar became an existential threat to coal and gas.

Obama had some fairly close ties with oil/gas despite him trying to tout his green credentials.

Those tariffs are brand new and in the US, but the data in TFA is fro last year in Australia.

A) Solar tariffs were initially brought in under Obama and B) I figured the question was a general one - not specific to Australia.

The reason for the tariffs is definitely related to why the costs are so low.

1) Chinese manufacturers stole American technology and are producing without having paid the R&D.

2) China is heavily subsidizing the industry on many levels all the way down to raw materials. If China were a company in the US we'd be calling them out for violating our monopoly laws, driving everyone else out of business.

I don't support tariffs on anything under any circumstances, but I think it's important not to let the discussion get framed as a simple: Obama/Trump hate solar because donors. There's a bigger geopolitical game being played here.

I skimmed the state department report justifying the tariffs and one of the justifications they gave was "local governments in China promoted local solar companies on their websites. This amounts to free advertising, which is a subsidy".

The phrase "clutching at straws" jumped instantly to mind. I think they weren't expecting anybody except the Chinese to actually read it. There were zero reports in the US media on its contents. They basically just reported that the report existed.

I have seen precisely zero evidence for 1. Frankly, Chinese solar tech beats US tech hands down. The US might be better at making ridiculously expensive panels with 2% extra efficiency to go on satellites but Chinese companies aren't even competing in that market - their tech is centered around making panels that are acceptably efficient with aggressive cost cutting in their manufacturing process. They're hands down the best in the world at that.

China does get an implicit subsidy via the suppressed yuan but that applies equally to all Chinese products, not specifically solar panels, so if you're going to slap 30% tariffs on solar panels why not assembled iphones too?

The geopolitical game being played here involves one of misdirection. If you follow the trail of money it becomes clear what is really going on. The US solar manufacturing industry is small and makes almost no political donations. The US solar installation industry - who lobby against tariffs - is much larger and contributes much more. Both are completely dwarfed by political contributions from coal, oil and gas.

The idea that Obama and Trump (the latter especially not being known as being a friend of clean energy) are simply trying to help a weak and politically irrelevant industry out of their green, green hearts and only coincidentally helping their "real" friends I frankly consider an insult to my intelligence, but hey, people lap this shit up.

Don't they?

In 2009-ish China announced subsidies of basically half the cost of any large scale solar installations. The Chinese government has been giving solar companies below market rate loans. According to Scientific American China chipped in $47 Billion to build its solar industry.

This is, of course, in addition to the standard protectionist industry subsidies like the Joint Venture rules, subsidies on raw materials like steel, or transportation of such goods via rail, etc.

[1]: https://www.scientificamerican.com/article/why-china-is-domi...

The tariffs under Obama were much more specific as to country of origin, and Chinese manufacturers quickly dodged them by moving. The current tariffs are in essence new in that they apply much more broadly and are not specific to China.

I think perhaps you should have avoided using the phrase "brand new" to refer to tariffs that are not new and have simply been tweaked. Right?

I think it's also cute how you think Trump of all people is so concerned helping out US solar manufacturers given his, y'know, words.

Maybe I'm missing it, but I don't see an indication of how much storage they are talking about here. The problem with renewables is still intermittence, and geographic dependence. Solar does no good at night, and there are days the wind doesn't blow. The costs of storage for that bulk application still don't seem to make sense, and I don't see it addressed here. The Tesla battery replaced power on the order of seconds, which is still a success, but not enough.

In general, solar has been great for reducing peak demand, since it has highest output during the middle of the day when electricity demand is also greatest. Not clear how much farther it can go, though. Wind may be able to replace some, but wind isn't strong everywhere.

"Solar does no good at night,"

There are already several thermal storage solar facilities in operation, with more under construction. The best of these can maintain output all night long. One is in Spain, one in Australia, a prototype I believe is still operational in California.

Taking a single family home off grid using slightly over sized solar and batteries is already cost competitive in most areas.

The real question is if economies of scale and the ability to shift demand across geographic areas offsets the cost of an electric grid + administrative overhead. Based on the constantly increasing rate of Solar deployments I can only assume this actually works out just fine.

> Taking a single family home off grid using slightly over sized solar and batteries is already cost competitive in most areas.

What areas? I've checked a few and it wasn't remotely close.

It starts being doable if you are willing to do things like load shed during the night - but I'm not. The goal would be for a zero impact on my lifestyle storage system (e.g. multiple days of storage for A/C use during cloudy/stormy weather, no 'no laundry days', etc.) and that simply isn't realistic yet.

I find this important since when I do go off-grid, I think it's immoral for me to expect the poorer folks who can't afford such equipment to subsidize my free battery by keeping an "emergency" backup connection like pretty much all "off grid" folks I personally know. Yes, it gets real cheap when you don't have to size for an expected worst-case - but that's not very interesting to me.

That said - some of the DIY hacker style projects are getting rather close. It's very tempting to start looking for a couple old Tesla battery packs and the like these days and go it alone. If that's the case, I expect within 5-10 years it will actually be doable commercially off the shelf.

First a backup generator is a lot cheaper than a backup grid connection for the next 20 years. Now, some would look at that as an extra cost, but IMO most homes should have an undersized backup in case the grid goes down anyway.

Next installation costs quotes are often insane, but basic equipment costs are not even close to that. A ~10KW system for ~1,600 kWh/month as a reasonable off grid system that's well above most homes normal usage levels and depending on battery power that should be well under 20,000$ before government incentives.

Now, you can start running the numbers on payback periods and whatnot, but it's close enough you need to consider your local rates not just dismiss it out of hand. Sure, you could use fewer panels but panels are only ~1/3 of the system price so no need to scrimp on them.

>I don't see an indication of how much storage they are talking about here

The final figure shows storage at various MW sizes for 4 hours, 8 hours, and 10 hours.

That said, we have almost no information about this bidding process, so we can't read too much into it.

But once you take into account that these are for projects that enter service in 2023, it makes a lot of sense. By then lithium ion batteries will be less than half the cost they are right now.

Vanadium prices have also been skyrocketing, so its likely that vanadium redox flow batteries may reach industrial scales by then, and could be as cheap or cheaper than lithium ion.

Electric demand is greatest in the evenings when people return home from work, cook, etc.

Solar production is greatest around midday. There is a lag time of about 6 hours between greatest production and demand, and the storage systems are designed to accommodate this.

So I gather you don't believe batteries will succeed as a solution

Not clear. If costs really continue to decline, batteries will make up a bigger and bigger part of the solution, but costs and uncertainty of the massive scale battery projects still seem high to me. Decreasing demand, nuclear, carbon capture, batteries, etc will all play a role IMO.

Carbon capture seems like a bigger wildcard to me than battery technology. Battery technology has been improving pretty steadily and will likely continue to do so.

Capturing carbon from coal power plants adds cost to something that is already not cost effective. Capturing carbon in the atmosphere likely will require huge amounts of power - and if its not 100% renewable power its kind of pointless.

Nuclear is better than coal or natural gas, but there have been some high profile failures lately and the lead time on new nuclear is so high, as well as the sticker price.

Nuclear and coal are available now and are known to work. Utility-scale battery farms of the magnitude necessary are not.

>Nuclear and coal are available now and are known to work.

Nuclear is not available now in the sense that you can order a plant and have it running in a year or two like you can with solar. More like a decade

Coal is available, but more expensive than natural gas. Coal is dead, did you really not know that?

>Utility-scale battery farms of the magnitude necessary are not.

But rapid progress is being made, and the utilities are planning for the future, which is only rational.

>Nuclear is not available now in the sense that you can order a plant and have it running in a year or two like you can with solar. More like a decade

The interesting aspect is that by the time a nuclear power plant is online renewable energy and battery storage might have advanced enough to make it uneconomical.

OK, so how long do you wait? How sure of a thing do we need? By that logic we wouldn't do anything. Do you think coal got started with a sure thing?

How is it we're more concerned with wasting some money than the possibility of catastrophic climate change? This is why the federal government should be more involved with combating climate change - nobody is willing to risk their money, or their power bill going up, even if it means essentially saving the world and/or our way of life.

https://hn.algolia.com/?query=solar%20never&sort=byPopularit...:

"solar will never solve baseline load."

"solar will never be able to replace traditional coal and gas-fired plants"

"such as wind or solar, can never exceed a certain percentage of the grid's production capacity"

"they are never going to be viable but for a small portion of our energy needs"

"entirely on solar? never."

"Solar will never be cheaper than coal"

And that's just the first page of results. There are 49 more... It's quite depressing that it's the tech community that has been badmouthing renewables for years, and the politicians were the one that made it happen.

Is there anything to the notion that the Trump administration putting a 30% tariff on imported solar panels is an attempt to bolster the coal or other fossil fuel industry?

Probably not. Trump didn't put these tariffs in place, he renewed tariffs Obama had put in place. I think those tariffs are more about protecting American manufacturing.

That's not true, the tariffs put in place by the Obama administration were targeting only chinese imports (because of suspected subsidies by the Chinese state), Trumps tariffs target every import.

I appreciate the correction, I didn't know that change was part of it. It still sounds reasonable to believe it's more about manufacturing than about coal. Not saying I agree with it, I don't like it, I want to encourage solar and wind, but I get the desire to protect American workers.

Unfortunately there aren't very many American solar manufacturing jobs. According to the SEIA, only about 2,000 Americans are employed in solar manufacturing:

"The Solar Energy Industries Association, a trade group, said Monday that Trump's decision will kill American manufacturing jobs, not create them. The trade group said that of the 38,000 solar manufacturing jobs in the U.S., only 2,000 involve making cells and panels, which are covered by Trump's import tax. The other 36,000 manufacturing jobs involve other equipment used on large solar farms and rooftop solar installations."

https://www.usatoday.com/story/money/business/2018/01/22/tru...

That still doesn't mean that the tariff isn't meant to help American manufacturing, of course, but it does so while harming the rest of the American solar industry. The people I know who work in solar energy were advocating for a subsidy for American panels to make them competitive with Chinese ones as that would benefit the entire US solar industry.

Doesn't the change make it easier for new solar manufacturing businesses to open?

It could, but most analyses I've read don't portray it as likely. The tariffs start at 30% but fade to 15% over the next 4 years, after which they are set to expire. It doesn't seem like anyone would be able to set up and launch a solar manufacturing plant and business in such a short time.

I sometimes wonder if this is actually damaging to American infrastructure in the same way that tariffs on RAM were to the US computing industry back in the day. The problem with RAM was that the cost of manufacturing required huge amounts of capital -- capital that was not forthcoming because the Japanese had already sewn up the market. I see a parallel here with solar panels and the Chinese. As solar becomes more popular (and it will), the capital cost required to stay competitive in the market will rise. Is there any US money available? If not, then you are simply making solar power more expensive -- and probably ultimately hurting your other manufacturing industries by taking away a future power source.

The one place I see the US having a lot of standing is in batteries. If I was planning strategy for the US, I would go "all in" with that. You already have a few capital rich players who are willing to invest in the technology. It is likely that batteries will be necessary in the mid term (though, I'm not certain how feasible chemical batteries will end up being long term). If the US decides to own that area, they can be competitive. If they decide to wait, then I suspect it will be too late (because it will become too capital intensive and too risky to go up against the established players).

Long story short: History will repeat itself and the US needs to be careful not to arrogantly ignore opportunities assuming that they can walk in and take over later.

Yet, most workers in the industry are not in manufacturing, but in installation.

That said, it's hard to know if Trump is just stupid or willfully trying to support coal and gas :)

There are U.S. solar panel manufacturers who were suffering due to the flooding of the market by Chinese imported panels. Is it possible for the man to do anything that won't be seen as evil? If solar is important to you, you should be happy to foster domestic capability, just as we foster domestic food production with farm and dairy subsidies. If you are a big-government type person, as most Trump critics are, this sort of federal level economic shaping should be something you can get behind.

If the goal is to reduce market flooding by subsidized Chinese panels, why not just apply tariffs to Chinese imports (like the EU does). Trump's tariffs apply to all imports.

    If you are a big-government type person, as most 
    Trump critics are, this sort of federal level 
    economic shaping should be something you can get 
    behind.

This is a fallacy. Here's a similar one to point it out: "If you are a person who likes rainy weather, the hole in your roof should be something you can get behind."

Specifically, just because someone supports the notion of a large federal government to tackle large problems, does not mean they should support the idea of a large federal government for any arbitrary reason.

That's true in theory, but rarely in practice. I'm surprised to meet a real life big-gov proponent that is against government interference in the free market. You are truly a black swan.

I never said I was a big-government proponent, I just pointed out that your attack against them was fallacious.

And you’re repeating the same logical fallacy (false equivalence [0]).

To elaborate a bit, an average big-government proponent might support taxing cigarettes.

I doubt you’d find a big-government supporter who would support banning all goods that werent produced by companies with an even number of letters in their name.

Both of those examples are of government intervention in the market, but one is clearly absurd. Not all government intervention is equivalent.

[0] https://en.wikipedia.org/wiki/False_equivalence

   > I never said I was a big-government proponent, I just 
   > pointed out that your attack against them was fallacious.

You didn't? Hmmm, well, somebody did. Either you edited or I confused you with them. Fine, you're not big gov, that's good. You and I are on the same team.

Your strawman refutations are not convincing. I would rather you managed to pull up examples that a government might actually in good faith propose, to attempt to fix a perceived economic shortcoming, but that would still be opposed by our hypothetical (not you apparently) big-gov proponent.

>There are U.S. solar panel manufacturers who were suffering due to the flooding of the market by Chinese imported panels

That's a loaded assertion at best. There were some solar panel companies that failed, but many that did not. According to the Solar Energy Industry Association, these two manufacturers failed because of poor business decisions that left them making products that the market did not want.

There's zero support for the notion that it was "Chinese" flooding, there were manufacturers from many other countries that were meeting the US market demand were Suniva and SolarWorld failed.

   > There's zero support for the notion that it was "Chinese" flooding

You'll have to take that up with Obama then, since it was his administration that specifically targeted China. It's amusing that I'm being attacked by both people who say the flooding was done not only by China and also people who say it was only by China. I think my main sin was implying on this board that Trump did something that wasn't evil.

The Obama tariffs on flooding were back in 2012, not now (and in the original HN discussion on this, I posted about them).

Further, these new tariffs apply to Mexico and Canada, and will likely be world wide, or at least will need to be since there is global competition, not just Chinese competition.

I'm opposed to these tariffs not because of Trump, because of the specifics on the ground. Citing Obama's tariffs and not recognizing that they are different tariffs, in different situations, is needless politicization.

So in lieu of innovation the solution is to tax competitors? That doesn't exactly sound like a sustainable path forward - what would be the incentive for domestic manufacturers to innovate the price downward if there's a safety net preventing any real competition to force them to do so?

They do compete against each other. They also compete with other forms of energy generation. Did you think there was only a single company in USA that made solar panels?

Not sure how you came to that conclusion that I believe one company manufactures panels in the U.S. but, for the sake of argument, if 30% more than foreign solar panels is the best price we can come up with than 1) that's not working and 2) a tariff will not solve pricing it only removes competition. Again, if they do not have to worry about lower-price competition, what incentive would U.S. manufacturers have to lower prices aside from a lack of demand? You seem to only be concerned about manufacturers in your statement and not the general public using these panels.

How about if I'm a globalist neoliberal who's also an environmentalist? "Fostering domestic capability" is nice, let's do that by investing in basic research, not by putting artificial barriers around us.

Actually, the US has an entity called the Department of Energy that does foster solar research. [1] If you're not US based, you may not know about this.

[1] https://energy.gov/science-innovation/energy-sources/renewab...

OK, so if that's really what we're interested in, increase its funding. Don't artificially slow the rollout of solar panels with trade barriers.

The atmosphere won't wait for us.

There's two problems:

(1) The bids include tax incentives. Without those it's much closer:

The cost of wind without storage was $18/MWh, while the cost of solar without storage was $29/MWh – both prices benefit from federal tax incentives, and would likely be around $US25/MWh and $US40/MWh without them.

(2) Solar and Wind are not 100% consistent producers. There are days where the wind doesn't blow, it's cloudy, or it's winter time. You have to have excess capacity in the grid for these events. So you can't just look at the price per mWh. You have to include this excess capacity in the cost of your wind/solar system

(1) I don't know how it's in the US, but in France the price for wind turbine projects must include underground electric cable setup and retirement of old turbines after x years.

I don't think it's included for any other kind of energy source.

(2) You are thinking the old way, the way fossil fuel formatted your thinking. There is always wind __somewhere__. There is always sun __somewhere__. We currently have very centralized way of harvesting energy. If we want to transition to alternative energy sources, it must come with changing the shape of the grid to accommodate a more decentralized system. Also partnership between countries would help a lot.

It would be great if we had a continent wide grid that could efficiently transfer energy from one region to another, but we don't. Building one would be enormously expensive and we'd lose a lot of power in transit.

You don't need that. A grid at the country scale is enough. Power is less consumed during the night, so using only wind by night is alright.

Plus we already have "grid-contract" with neighbors in France to load balance.

And even the biggest defenders of solar and wind don't advocate for going 100% at first. Mixing sources and increasing solar / wind gradually years and years is already nice.

Wouldn't it be great if such a thing existed?

https://en.wikipedia.org/wiki/Wide_area_synchronous_grid

There's nowhere near enough capacity to transmit enough solar power from say Florida to power the Northeast. Besides, then you still run into problem 2. Florida has to have enough excess capacity to support the NE. And enough excess to make up for summer vs winter.

A wide grid is extremely costly, also the grid is not sexy, politician don't care about it, so there is little incentive to make it. Outsourcing your electricity production is a political hazard, for Europe it would mean put it in north Africa, still an unstable region, electricity production sovereignty is paramount.

Most electricity in France come from nuclear energy, and the radioactive material isn't found in France.

However, wind and solar are found in France in great quantity

Besides, nobody advocate to go full wind/solar and discard all the rest at once. A mix is a nice first target.

The article's purpose is to draw attention to renewable solutions with energy storage (e.g. batteries). "The significance of the tender result is the small additional cost of storage – between $US3 and $US7/MWh."

Storage typically is only enough to store energy generated during the day for use at night. It's nowhere near enough to account for seasonal changes or extended bouts of cloudy weather.

True, we need a global grid.

Energy loss during transmission makes this unfeasible.

HVDC is not that bad. Siemens quotes 2.6% losses in 800km line @ 800 kV:

https://www.siemens.com/press/pool/de/events/2012/energy/201...

Point taken.

I would love to get solar panels but it feels like the price is artificially high. Panel costs keep going down but I've never seen a set of solar panels for less than $20k, regardless of panel cost. I think the solar companies keep increasing other costs to keep it at the same level, which means there isn't enough competition yet.

Decreases in panel costs result in only modest decreases in residential solar costs, because the panels aren't the bulk of the cost of install. There's all the labor of installing them, the other equipment like inverters and electric panel upgrades, the engineering time to evaluate the site and design an optimized system size and placement, and then just the general overhead that comes with the business (sales, marketing, admin, billing, etc.). The panels themselves might only be 30% of that.

Looks like even less than 30% - the chart in this article shows panels are only around 10% of total cost for residential, meaning further panel price declines now have very little effect:

https://www.pv-magazine.com/2017/06/12/u-s-utility-scale-sol...

As you imply, for utility scale the other costs are much lower, so falling panel costs still have a significant impact on total price.

http://sepbatteries.com/canadian-solar-cs6p-240p-solar-panel...

<$2400 for the 4kWh I'd need to power my house.

I could have missed it, but does this take into account subsidies provided by the Chinese government?

Although the site is Australian, the cost info is from Colorado, the US already has anti-dumping levies on Chinese solar which will be reflect in bids so yes it does take solar subsidies into account. It doesn't however account for government subsidies of coal.

I thought the US just added anti-dumping levies. If so, the price wouldn't reflect that change yet.

As to the coal, fair point.

Or, alternatively, the thumbs put on the scale by any other government for any energy source. Maybe the Trump admin tacking a 30% tariff on non-US solar benefits non-US solar in other markets -- there's less demand for the current supply.

From the point of view of the australian government, does it matter?

Wind + batteries came out cheaper than solar + batteries so I guess the chinese subsidies were not that critical.

I always wonder - do the bid prices really reflect the future? I mean it is entirely possible for these prices to not hold long term and many of these projects shutting down/ending in huge losses.

Anyone in the solar energy industry have some insights on the pricing?

(disclaimer: I work in a Climate and Energy R&D group)

I just want to jump in here because these numbers are all strange.

The author mixes units all over the place (e.g. MW vs MWh). The article confuses nameplate capacity and marginal cost. And there is no mention of capacity factor or dispatchability.

Very simply, the current state of the world:

- Renewable energy is getting more popular, and has zero marginal cost. That means they always sell to the grid, regardless of cost, and drive high variability in daily demand.

- Coal and nuclear have higher capital costs, and thus require 90%+ utilization to stay competative with natural gas. However, demand is low for a quarter the day now, so they are out. There is no saving coal, no matter how much political rhetorical goes into it, the economics do not work out.

- Renewables by themseles are not dispatchable. Do not confuse them with natural gas/coal/hydro/nuclear.

- Renewables+storage would be dispatchable (especially if you add HVDC to lower variability), and this gets us into the actual numbers from the article...

Lets do some math

Batteries currently cost about $150/kWh. That will continue to come down, but let's say we want to build a plant in the next 5 years, so maybe $100/kWh if we are really lucky.

For a 200MW dispatchable solar/wind plant, we'd have:

- ~25% capacity factor would be very optimistic (they aren't building in an ideal location in CO).

- That means 800MW of nameplate capacity to get an average of 200MW output.

- $1/W nameplate for solar these days => 800MW nameplate plant at $800M for just the solar.

- $100/kWh for batteries. Even if we only needed 24h of storage (though realistically you need more like 3 days), that means 200MW24h$150/kWh => $480M

=> Total plant cost is $1.28B, for 200MW of output, or $6400/kW.

Let's say we have

For 30 years, with a 5% rate of return on capital (3% over inflation), and a 1% O&M/y cost (this is really low, just to give it a fighting change, 3-6% is typical), that ends up as....

5.5 cents/kWh.

Which is way above natural gas (4 cents/kWh), so they'd never take it without federal subsidies.

Any bid below that isn't likely to be fully dispatchable, which makes it even less competative with natural gas, even if it is cheaper.

It's hard to compete with a low-capital cost power plant that has nearly free energy flowing out of a hole in the ground.

I'd be very surprised if these bids came with more than 4 hours of storage. That's enough to prevent a California-style "duck curve" and to serve the early evening peak demand. It's also enough storage to severely dent the economics of new fossil peaker plants -- perhaps even those of already-built peakers.

These solar + storage proposals are not 1:1 complete replacements for traditional dispatchable power. But with 4 hours of storage a solar plant can run for hours after sunset, serving the highest-demand period of the day (which is also the most lucrative period in deregulated electricity markets). Just a few hours of storage significantly increases the upper limit to solar generation's share on a grid without excessive curtailment.

EDIT: you probably know this. I'm just using your comment as a jumping-off point to elaborate.

This also assumes a consistent natural gas market over the next 30 years, which is far from certain. Gas prices can fluctuate greatly, and the global political climate is increasingly hostile to fossil fuel sources.

The theoretical solar plant at $.05 is unlikely to change, but the theoretical gas plant at $.04 is a variable that could very well go way up.

Thanks, I appreciate the rundown. just for clarity - in the battery step you wrote the calculation using $150/kWh instead of the mentioned $100/kWh. The final $480M is still correct

EDIT AGAIN: No, this is the same as the article I thought it was. They didn't actually specify the cost vs duration of the storage. There's a figure which shows duration for another project, but pricing info is not shown, so it's not very useful.

But I did manage to find this linked to in the story, which does specify duration in parts: https://www.greentechmedia.com/articles/read/record-low-sola...

This is a continuing pet peeve of mine: "solar plus storage" but very hard to actually parse out how much storage they're talking about.

In the article (in an image) - states 4 to 10 hours: http://reneweconomy.com.au/wp-content/uploads/2018/01/Screen...

...but doesn't state what costs are associated with those varying durations.

This is a basic numeracy/literacy issue. I'm super bullish on solar and storage and follow this issue in the news, which is why it's so frustrating when these things aren't clearly communicated...

If that is true (costs include just 4-10 hours) then the cost comparisons are absurdly misleading.

The reality is that the grid needs to work when there is no sun or wind for days or even weeks.

Even that would be impressive. But it's just not clear that that is what the data says. 4 hours of storage, if the storage is expected to cycle twice per day (once in the morning, when sunlight is still dim but demand has picked up, using fossil/nuclear/geothermal/wind energy generated at night when demand is super low, and once in the evening as sun sets but demand still high, using solar energy generated during the day), then that is a factor of 2 better for costs than if storage is expected to only cycle once a day or worse.

But we can't tell because the article doesn't mention any of these details. This factor of two (or more) is the difference between status quo and a revolution, but the article remains unclear.

> The reality is that the grid needs to work when there is no sun or wind for days or even weeks.

Renewables do not need to provide that capability today or tomorrow. Renewable penetration will take a few decades to reach that level where we have to worry about that and by that point storage will hopefully be up to the task. Right now just a few hours of storage is already enough to shave some peak demand off fossil fuel plants.

It's too bad you hadn't read the article which deliberately mentions this...

Where are both costs and duration mentioned clearly?

I know next to nothing to Power Generation Bid, but I am always puzzled that these articles always mention cost estimation coming from the bidder. Are we sure the lowest bidder can actually deliver at that cost point down the line ?

The price they pitch is the price they are paid per mwh. If they can't produce it that cheaply they can choose to either sell at a loss or shut down. People do sometimes sell at a loss - but that is a business decision.

Basically the contracts say - for every mwh supplied, this is what we will pay for you for this period. So it is self governing - no point in lying, as you simply won't get paid any more.

those "estimates" likely get written as hard promises into contracts in the form of long-term power purchase agreements.

The bidding, assuming it is competitive, drives down the current price in favor of the utilities. The long-term agreements provide stability in favor of the suppliers in case market prices plunging even further than estimated.

I have not followed all EPR nuclear reactor project, but it seems some project have a hard time to deliver. So is there somewhere an example of catastrophic failure ? or on the contrary, wind/solar project tend to be completed on time, with the expected cost for the provider ? Naively I would think that latter kind of project are much lower risks.

Wind and solar projects have the lowest overrun risks of all utility-scale electricity projects:

https://www.sciencedirect.com/science/article/pii/S036054421...

https://www.sciencedirect.com/science/article/pii/S221462961...

A 500 megawatt solar project is, approximately, 100 5-megawatt solar projects tiled together and sharing a transmission line. There are large parts of the project that can be built in parallel without scheduling dependencies. There are multiple vendors available for each equipment component (racking, tracking, inverters, modules) and there's a lot of mix-and-match flexibility. You don't have to buy Panasonic inverters and monitoring software just because you went with Panasonic modules. Large projects usually start generating power before their official commission date, because you can energize completed subsections as soon as they're connected to transmission.

Nuclear projects are pretty much the complete opposite. There are tightly coupled dependencies. A delay in one component (like a coolant pump) means that the entire project timeline slips. You can't play mix-and-match with reactor components -- no Westinghouse core plus Mitsubishi containment system. Unlike a large solar farm, a large reactor can't start generating partial power when the project is only 50% (or even 85%) complete, so financing weighs more heavily on the project economics.

Reactors that are up and running are great, and I deplore their premature retirement. But building new reactors is a slow process where the payoff comes only at the end.

Nuclear (from what I understand) usually has both far higher bid/pitched costs, plus an agreement to pay those over a longer period. Plus they usually come with finance or arranged finance.

The risk is in the building, but once built they are (in theory) a cash cow. But govt seem to find all sorts of ways to subsidise them - offering the clean up etc. P

Can someone provide a bit more details about this. Is this only if you have a massive solar farm (which I assume is cheaper due to land value + large quantities) or does it also include solar for residential (which I assume is more expensive due to installation, limited area, etc)?

When looking at a satellite image of LA, I wonder how much power we could generate by having panels installed on the flat/near-flat rooftops of apartment buildings, at least in the sunnier parts of the city.

Arguably, the US has Trump as president due to coal interests. But I doubt that the next administration will go as far as Obama did in trying to shut down the coal industry - too politically risky to lose PA again. This political-economic dynamic does imply that there will be a tipping point were coal-fired power plants shut down en masse. I wish that day would come sooner rather than later since our air quality sucks.

Intriguing! Maybe Dems should work to bring renewable energy projects to PA, so that in 10 years they can swing the workforce away from coal.

I always wondered why this didn't happen in every area with coal. I get many of these areas are not the best for solar or wind but if you provide a way for these people to transition to something different you're far more likely to win their support versus the narrative that ran rampant in the election where no one cared about the coal miners.

People have been trying to transition coal miners via education programs and funding for a while now.

The sad truth is that coal miners want to continue being coal miners because they have wrapped up a lot of their identity into the job.

Well we're going to continue to need coal in possibly decreasing amounts for the next couple of decades. No way are we decommissioning all coal-fired generating any time soon. That should be enough time for natural attrition to handle the current mine workers. The effort should be in getting young people interested/trained in something else before they follow their fathers into the mines.

As long as folks like Trump keep selling them on the dream of "coal forever", they're not going to listen to common sense. Politicians see them only as votes and not as constituents to be cared for.

The UK went from 1.2 million[1] workers in the coal industry in 1920 to nearly zero now. It was painful at times though and many of the former coal towns have never really recovered.

[1] https://www.statista.com/statistics/371069/employment-in-coa...

Completely side topic question - are there any studies on how much surface of the planet would need to be covered with solar to make a measurable impact on absorbing and/or reflecting enough sunlight to affect some cooling?

> Completely side topic question - are there any studies on how much surface of the planet would need to be covered with solar to make a measurable impact on absorbing and/or reflecting enough sunlight to affect some cooling?

I don't think solar will have any impact here. The whole point is to absorb the light (and energy), not to reflect it. That's one of the reasons solar panels appear black, not white: they're absorbing light.

If the alternative is coal, solar energy will warm the planet less, but it's not going to actively cool the planet the way you're describing.

Naively thought that by absorbing heat energy and transforming it into electric current, there was some cooling effect when compared to heating the surface of the planet.

There is localized cooling in the cell. Some photon energy that would have been thermalized immediately in a dark-colored simple absorber is carried away as electricity instead. But that electricity is, ultimately, used and thermalized somewhere else on Earth, so it doesn't have a cooling effect on the planet as a whole.

Additionally, the albedo of solar modules is lower than e.g. empty desert, so the net effect of installing a large solar array on such land is to slightly increase localized temperature. Accounting for increased albedo is why the IPCC's global warming assessment of utility-scale solar puts its warming impact a bit above that of rooftop solar. Rooftops are already lower in albedo, so adding solar modules doesn't darken them as much. Both rooftop and large desert-based solar have much lower warming potential than any form of fossil combustion, of course.

Thank you for the excellent explanation!

Earth's energy budget imbalance is around 0.6W m^2[0], while a passive cooling device developed by SkyCool Systems achieves 40W/m^2[1] of cooling power, so covering 5% of the land should be enough to balance things.

[0] https://en.m.wikipedia.org/wiki/Earth%27s_energy_budget

[1] https://www.google.it/amp/s/www.technologyreview.com/s/60884...

5% of the land or 5% of the surface of the Earth?

And 5% of either of those is an absolutely stupendous amount of space.

In any case, those cooling devices aren't needed if all you want is to block the sun - a mirror works better. Those cooling devices are for heat generated from behind the device.

Solar panels in and of themselves make the surface slightly warmer, not cooler. Their beneficial effect is through preventing the emission of more CO2 into the atmosphere.

Sounds like you never touched a solar panel on a sunny day.

Nope, totally ignorant here :)

Anyone know why the project bids are in units of energy? From my experience with home solar projects are priced in units of power.

(EDIT: From further in the article, these look like operating costs, not e.g. initial build-out costs that one would be quoted for a home installation. Makes sense, though I wonder now if they include amortized build-out costs.)

And then, why the mixing of MWh and kW·mo? They're similar orders of magnitude, why add in a layer of confusion with the constant factor difference? (For reference: multiply $/kW·mo by 1.39 to obtain $/MWh.)

From the source document https://assets.documentcloud.org/documents/4340162/Xcel-Soli...

"Pricing is provided in $/kW-mo terms for those generation types that can be viewed as dispatchable and likely to provide high levels of generation capacity credit. Pricing is provided in $/MWh terms for those generation types or resources that are non-dispatchable or that include a storage component with a non-dispatchable base generation resource."

They're paying for whatever wind and solar can provide but require fossil fuel plants to produce what actually need.

While I am unsure about the different units for conventional vs. renewable energy, pricing for large scale power projects is generally reviewed on a per unit of generation basis, not a capital cost basis. That way the cost incorporates all costs, including operations, maintenance, financing, insurance, and so on, and also includes expected plant performance levels. The $/MWh cost to the utility is the fairest way to compare different sites and different technologies.

Hah. These shortsighted "renewable energy" fanatics will sure be sorry when the sun burns out, and we have to fire up all those old mothballed coal power plants that they have heaped such scorn on.

Old news

Solar with batteries $40 (that only last 10 hours max then blackouts).

Gas turbines $4.80.

> renewables are cheaper

Storage prices have fallen by about 7% per annum over a long period, with some fits and starts. This is no Moore's law.

This article is very slanted, expected from a player in the process.

As the price of renewable energy sources drops it's gonna be harder for states to dismiss the high cost of corruption and incompetence in the energy procurement process by telling consumers "your electricity is so expensive because we buy organic, sustainably farmed, non-gmo, carbon neutral electrons"

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