Note that since about 2021 renewables have overtaken fossil-based sources of energy on price. New installations of utility scale wind and solar PV are now cheaper than their alternatives. Not to mention protection from price fluctuations in the cost of fuels needed to power fossil fuel plants.
The backlog of hooking variable load sources to the US electric grid is very long, often requires retrofitting the grid, and cost is borne by the generator.
It's not as simple as having the capacity because power is used the instant it's produced.
IIRC there are actually starting to be wind, solar and pumped hydro sited at former coal mines and plants because they already have transmission capacity. (In the case of pumped hydro, a coal mine can also act as a big hole with an elevation difference to drive a turbine.)
There's lots of exciting progress happening with underground mechanical storage like this. It's so interesting that the U.S. DOE has been studying underground pumped hydro since at least the 1980.(https://www.osti.gov/servlets/purl/6517343)
Today:
- Hydrostor just signed a near $1 Billion contract to build their first underground facility in California using advanced compressed air with water to help efficiency.
See also: Green Gravity, Gravitricity, Terrament, Renewell, RheEnergise, and more.
My comment is less about storage and more about the physics of the Grid (not an expert though so fact check me) It's largely one giant multitenant pool of both capacity and consumption with Voltage being the indicator.
Variable load sources often change transmission requirements on existing lines because there can be power draw increase between A and B where previous there was less generation at A.
Back before the interest rate increases even barely tenable projects were doable. Cost of financing is higher now, so the risk equation changes.
That company is still going ahead with a project in New York, and Jersey has another wind projected lined up from another company.
Wouldn't take this single data point as indicating anything meaningful
Yeah, start-upsnonly fail because of the interest rate hike and not because they are unsustainable businesses. But other sectors requiring serious financing are absolutely not affected... Not.
Ørested isn't a startup, it's a decades-old energy company which built the first off-shore wind turbines. It used to be called DONG, Danish Oil and Natural Gas.
And their projects still need outside funding. Funding which is impacted by inflation and intrest rates, expoaing the project, and hence the company behind it, to financial impacts the same way start-ups are: money all of a sudden isn't free anymore.
Offshore wind is also the most expensive form of wind/solar.
With financing getting more expensive its almost certain that some of the more financially on the edge projects would get cancelled and since offshore wind is easily the most expensive, it’s unsurprising that in renewable energy those are the projects getting cancelled.
That's if you make up some number for fossil fuel externalities and count it as a subsidy. Pollution from fossil fuels is a very real and very big issue but it has been presented in such a way that people think governments are actually giving oil companies trillions of dollars in direct subsidies. No other business has had this kind of math applied to it. The fossil fuel industry is taxed heavily from when the oil comes out of the ground to people pumping gas into their cars, it is a huge tax revenue generator.
I really want to emphasizes the "make up a number" part. Trying to understand the physical part of climate change is already a monstrous task with big uncertainty. From there trying to to estimate economic effects is basically impossible.
Citation needed for that number, I suppose, because the number is absolutely made up. There is no way to determine the cost of the externalities of fossil fuels (if they exist). Even if we were to say that CO2 is causing global warming so we need to remove it from the atmosphere, such technology does not yet exist, so we don't know how much it would cost.
For renewables, most of the cost is up front, then they're cheap to run because they don't need fuel. (High capex, low opex.) Fossil fuel plants have more of a mix of upfront and operating costs. High interest rates make it expensive to borrow the upfront cost of renewables.
Let us say that solar and wind is about 25% more expensive to build. All types have high up front costs, so interest rates will affect nearly equally. However, operations for solar and wind must be way cheaper over 10/20/30 year time frame. To be fair, I never read anything about maintenance costs for solar and wind. It certainly isn't zero, as the wind turbine will need periodic servicing, and the solar panels need to be cleaned.
> To be fair, I never read anything about maintenance costs for solar and wind.
Indeed. Those costs are never counted (e.g. how do you service and repair offshore wind farms in the middle of the North Sea). As the costs of decommissioning and replacements are never counted either. Neither are the costs of overprovisioning required for renewables.
Of course these costs are counted. You do realise these are companies running these North Sea windfarms and selling the electricity to the grid? Do you think they suddenly go, "Oh, we forgot about maintenance costs! We're losing money now!"
They sell to the grid at a price that makes them a profit. How did you think this all worked?
On the other hand fossil fuel costs are risky, and if we plan to steer away from the worst climate disaster using policy tools, the cheap fuel will be gone within a plan't lifetime.
there is another important metric that most of these cost calculations ignore - the cost of reliability. Renewable generators create this problem due the variable and uncertain nature of their fuel. The cost of dealing with this is not paid by them.
there might be privileged financing somewhere i'm not aware of but it's a tough space rn. had breakfast with someone who's been in financing and constructing these for a long time and he's still working on it but much tougher.
if you want a public markets proxy, look at invesco's solar etf; down by around half. sedg is down 75%
existing infrastructure is more maintenance than construction
I have, what you may be missing is current interest rates are linked to high inflation rates which drive up the long term costs of fossil fuels. If inflation drops and interest rates drop you can refinance your renewables.
The calculation depends on how good the specific location is for wind/solar but outside of unusually poor areas, like the UK, solar is easily the cheapest option.
