Comment by auspiv | Hacker News Reader

Comment by auspiv | Hacker News Reader

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There are three related headlines that have been popping up for the last few years, that somewhat contradict each other:

1) "Wind and solar are super cheap and continue to get cheaper"

https://cleantechnica.com/2024/06/25/lcoe-of-solar-wind-stil...

https://www.theguardian.com/australia-news/2023/dec/21/solar...

2) "More solar and wind was installed in the last year compared to last year - 1"

https://www.canarymedia.com/articles/solar/chart-the-us-inst...

https://apnews.com/article/energy-global-wind-report-2024-74...

3) "Utility bills have never been higher"

https://www.utilitydive.com/news/us-electricity-prices-rise-...

https://www.nytimes.com/2024/02/13/business/energy-environme...

https://www.nytimes.com/2024/01/11/us/politics/utility-bills...

So, how can all three of these phenomena be true? Is solar/wind actually cheap? Are utility companies pocketing the difference (hint: yes, in many cases, but co-op prices are also at record highs per kWh)? Is something else going on (meaning wind/solar aren't actually "cheap" in the whole scheme of running a reliable grid 24/7/365)?

Electricity market design that sets prices based on the most expensive generation (i.e. gas) is the big one recently (though non-generation costs can be 2/3rds of your bill):

https://www.ucl.ac.uk/news/2022/jan/opinion-renewables-are-c...

> The knock-on effect to energy bills is amplified in the UK and other countries in Europe where electricity is organised through wholesale markets (in which generators bid to operate if the price is right) and in which most homes rely on gas for heating. Average home energy bills in the UK, which rose to over £1,200 (US$1,630) in 2021, are predicted to shoot up by around 50% in 2022. Up to half of the rise will come not from the gas you burn, but from the impact of gas on electricity prices.

> So why is a gas price crunch being felt just as strongly in electricity bills? After all, gas generates less than half of electricity – under 40% in the UK and only about 20% across the EU.

A simple solution would have been to windfall tax the war related gas profits and return them to the people, which I think many governments did but some were ideologically opposed to taking unearned profits from large corporations so delayed it or did it as little as necessary.

> how can all three of these phenomena be true?

Your Utility Drive link hints to the answer. "Transmission costs and volatile fuel prices are the primary drivers of higher power bills, according to Tyson Slocum, director of Public Citizen’s Energy Program."

We're finally paying the piper for the decades of neglect to maintaining the grid in some places, and needing to massively build out new infrastructure in some places as populations move across the country. Some cities around the US have continued to see massive growth while tons of small towns are losing a lot of population, meaning the infrastructure that was good 30+ years ago doesn't work with where people are today. So we're needing to spend a lot more repairing stuff that got put off for decades and rebuilding a large chunk of our grid to face the realities of how our society is today versus a long time ago.

Also, rising fuel costs for when the wind isn't blowing and the sun isn't shining. If fuel costs are outstripping the increase in cheaper per-hour renewable, overall costs still go up in the end. FWIW, most co-ops around me are more expensive than the non-co-op areas.

At least in Germany the price per kWh of wind and solar is super cheap.

But the dispatch of energy costs money which everyone pays for.

Dispatch means that an overproducing solar farm or wind farm gets disconnected but still gets compensation for this.

Keeping gas plants costs money too.

I think we currently pay for making standby energy solutions a lot cheaper.

Either through gas plants and cheap gas storage or batteries. There is a lot of movement in redox flow batteries and normal batteries too.

Diy is already at 150$\kWh.

Cars have already 100kWh and 100kWh is enough to heat a whole house in the winter for 2 days when using a heat pump.

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