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Page added on August 16, 2013

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Proof That Renewables Can Out-Compete Coal

Proof That Renewables Can Out-Compete Coal thumbnail

Germany’s second largest energy company (RWE) made a stunning admission yesterday. Well, stunning if you have head your head stuck in the sand when it comes to the rapid evolution going on in the energy world.

RWE announced that “Due to the continuing boom in solar energy, many power stations throughout the sector and across Europe are no longer profitable to operate” and as a result announced that it will take 3.1GW of Fossil Fuel generation capacity offline because ”its no longer competitive.”

In simple terms, without any fuel cost (and against rising coal, gas and environmental costs) renewables are lowering energy prices in the market, a point highlighted by EPEXSPOT (a European power exchange) which today traded peak power at almost 3% LESS than the base load energy price (USD$0.04219 Versus USD$0.4353). The following graph demonstrates the changing trend over the last 12 months in the Austrian and German market.

epexspot aug 2013

There is more to complex energy trading markets than this simple story but two things are patently clear and proven by this public statement;

  1. Renewable Energy LOWERS energy costs in a wider market context because they have no fuel cost once installed. And in the MAJORITY of cases, consumers (or investors) pay for it with their own money, not the Government and taxpayers. Yes, they get some support through subsidies, (although these have waned dramatically and universally) but so do almost all forms of generation according to the IMF. Anyone who says that Renewable Energy simply increases energy costs is out of touch what what is possible and indeed, what is happening today.
  2. This highlights the real reason why owners of non renewable generation, coal assets or associated infrastructure are making such a strong and concerted stance against renewables, and in many cases spreading fear and mistruths. They are trying to prevent the types of losses that are happening to other markets with higher Renewables penetration from spreading here to their business; despite it being dressed up as protection for consumers.

Now lets be 100% clear here; sending any non renewable business broke, or in much of Australia’s case, wrecking State budgets by stripping returns from State owned assets is not “a win” for anyone. I don’t know a single reasonable person in the renewables sector who wants that outcome.

Quite simply, there is a change going on and like so many others, we are simply asking for the bs to stop and for us to all get on with the job of evolution.

The truth of the matter and the alternatives are so blindingly obvious I just wonder what it’s going to take.

solar business



23 Comments on "Proof That Renewables Can Out-Compete Coal"

  1. Arthur on Fri, 16th Aug 2013 8:02 pm 

    And not just coal, also gas:

    http://www.volkskrant.nl/vk/nl/2844/Archief/archief/article/detail/3305473/2012/08/24/Gascentrales-vaker-stil-door-import-groene-stroom.dhtml

    The EU has a highly integrated electricity network. So if, say, in Spain a power station goes off the grid, within minutes a, say, Swiss hydrokraftwerk can take over.

    The point is that the meteoric rise of solar in Germany is making itself felt in for instance the Netherlands. If the sun is shining brightly, obviously nothing can compete with ‘free’ electricity from Germany. And so it happens often that brandnew Dutch natural gas powerstations are switched off because of the flood of cheap solar electricity from the East. Gas based Dutch power stations have trouble to compete with this new development.

  2. Plantagenet on Fri, 16th Aug 2013 9:01 pm 

    Electric power generation is SUBSIDIZED in Germany while coal power is not.

    Crowing because the price of SUBSIDIZED solar power is less than UNSUBSIDIZED coal power is silly.

  3. sandu on Fri, 16th Aug 2013 9:12 pm 

    This is a big win but at the same time a very big problem because that capacity will be needed in winter and there is no mechanism to keep it online.
    We will see record peak prices this winter.

  4. BillT on Sat, 17th Aug 2013 1:39 am 

    Note the source of the ‘news’. This is just more propaganda to sell solar.

    The fixed assets that burn coal are going to prevail as long as they are profitable. Energy storage is the big anchor dragging on solar as there is no real way to store city sized quantities for the times solar doesn’t work, which is most of the time.

  5. DC on Sat, 17th Aug 2013 2:14 am 

    Plant, are you a habitual liar?, or do you just suffer from the typical amerikan tendency to say whatever supports whatever ideological position you happen to have staked out-facts be damned? (aka lying)

    Germany gives plenty of subsidies to coal power operators.

    http://www.ecopolitan.org/news/coal-report-state-subsidies-coal-power-sector-germany-1950-2008-euro-4321-b

    In fact Ms Merkell wants to keep on subsidizing coal, even though the EU generally, would rather not.

    http://www.platts.com/latest-news/coal/London/Germany-to-press-EU-to-allow-coal-subsidies-past-8196528

    You see, that what happens when you live in fact-based world. It must be very disappointing to learn the world actually operates rather differently than plant wants to believe.

  6. Arthur on Sat, 17th Aug 2013 4:45 am 

    “This is a big win but at the same time a very big problem because that capacity will be needed in winter and there is no mechanism to keep it online.”

    Not entirely… Wind and solar compensate each somewhat over the summer and winter season. But the real difference is going to be made by hydro storage, currently in Europe ca. 18 days worth of total electricity production. Expanding that capacity is underway.

  7. mike on Sat, 17th Aug 2013 6:18 am 

    We’ll see what happens to energy and food prices over the next decade. If they rise Arthur has to eat his shoes. If they fall I have to eat my poos.

  8. BillT on Sat, 17th Aug 2013 6:48 am 

    Mike, I don’t think you are in any danger … ^_^

  9. GregT on Sat, 17th Aug 2013 7:08 am 

    Arthur,

    Just when I thought that you were actually starting to wake up, you have surprised me, once again.

  10. Arthur on Sat, 17th Aug 2013 9:09 am 

    The only (little) chance I will have to eat my shoes will be if the US starts a war against Iran, interrupting the flow of oil and gas to Europe, which is becoming less likely by the day, considering the developments in Syria and Egypt. Instead Washington will have to step up their efforts to keep any pied a terre in the ME in the first place if KSA falls to the MB.

  11. Harquebus on Sat, 17th Aug 2013 9:45 am 

    As the price of energy continues to rise, so will the cost of producing and maintaining these inefficient devices. They don’t last forever and do not return the embodied energy used to manufacture them. If they could and then some, we could use the surplus energy to expand the production base and our problems would all be over.

  12. Ert on Sat, 17th Aug 2013 12:07 pm 

    Renewables in Germany are highly subsidized and have network priority. Nuclear cant be regulated Änderungen does the base load.

    Thefore coal and gas have a hard time – not because they cant cmpete at the “market”.

  13. Arthur on Sat, 17th Aug 2013 12:21 pm 

    “Electric power generation is SUBSIDIZED in Germany while coal power is not.”

    Utter rubbish. Electricity from coal, gas and oil is for fools. Solar already beats fossil with street lengths:

    http://deepresource.wordpress.com/2013/08/17/solar-panel-yield-in-the-netherlands/

  14. Mike on Sat, 17th Aug 2013 12:37 pm 

    We’ll see Arthur, get some tasty shoes in stock and I’ll start eating less fibre.

  15. rollin on Sat, 17th Aug 2013 12:39 pm 

    We live in an integrated technological system where multiple energy sources are needed to produce a product, ship a product, or repair a component.
    Meanwhile the oil pool gets smaller. They better find ways to build and maintain all this technology without much support from oil. Otherwise this will all be just more useless industrial relics in twenty years.

  16. Laci on Sat, 17th Aug 2013 1:41 pm 

    In Germany, coal is subjected to a carbon tax, while solar is subjected to a subsidy. In reality, EUrope is opting for a more expensive source of energy in the name of the global greater good, whacking themselves over the head economically speaking in the process, because they are being out-competed by everyone else on this planet at this point.

  17. mike on Sat, 17th Aug 2013 8:29 pm 

    Look once someone sets up an experiment where they only use solar energy to mine, transport, feed and transport workers, build , distribute, fit and fix more solar panels and it’s not a net energy loss, then I’ll take it seriously. At the moment it’s not only subsidised by governments, it’s also subsidised by the oil and coal industry. I think we’ll find when all is said and done that this form of solar energy is actually hastening the net energy decline.

  18. GregT on Sat, 17th Aug 2013 11:14 pm 

    Pretending that sources of alternate energy production are renewable, on any scale that will be useful to modern industrial society, without a massive input from fossil fuels, is akin to believing in a perpetual motion machine.

    It may be comforting to dream, but dreams are not reality.

  19. Arthur on Sun, 18th Aug 2013 10:16 am 

    “without a massive input from fossil fuels, is akin to believing in a perpetual motion machine.”

    Can I ask you what your formal education has been?

    I repeat my argument against the wide spread layman belief here that you need fossil to create a solar panel, where in reality you only need fossil to create the first batch of panels, after which the energy yield from these panels can be used to perpetuate the production process exponentially ad infinitum.

    Solar panel factories operate for 100% on electricity. That electricity can come from solar cells, produced two days earlier in the same factory. The latest, most promising development, is ultra cheap film technology that hardly requires any material at all and has layers of active material of merely a few atoms thick, attached to some cheap thin plastic or other supporting sheet material.

    “believing in a perpetual motion machine”

    That statement is wrong; the energy required to bootstrap an exponential solar panel production process can come from the SUN as well, not just from fossil, as long as the EROEI of the panel has a value larger than 1, which is the case.

    http://deepresource.wordpress.com/2013/06/29/eroei-of-photovoltaics/

    The EROEI value is increasing with every passing day. So far efforts were concentrated on increasing efficiency (as much photons as possible converted into electrons, present in the valence band, ‘becoming excited’, jump to the conduction band and become released), where it now seems to make more sense to concentrate on simple production processes with low energy requirements rather than concentrate on physics marvels.

  20. Arthur on Sun, 18th Aug 2013 10:29 am 

    “Look once someone sets up an experiment where they only use solar energy to mine, transport, feed and transport workers, build , distribute, fit and fix more solar panels and it’s not a net energy loss, then I’ll take it seriously.”

    mike, why don’t you invest 1 minute of your precious time in reading the few lines in the link presented in post “Sat, 17th Aug 2013 12:21 pm”

    Your life will never be the same again. ;)

  21. sandu on Sun, 18th Aug 2013 12:05 pm 

    Arthur calm down a bit , you sound like a religious nut :).
    It’s very hard to calculate EROEI for solar and numbers are all over the place. Maybe in 5-10 years we will have good numbers.
    It’s clear that now solar can handle summer peak load. Also at this level the instability that it creates in the grid can be handed by europe’s hydro on day by day.

    But if we look at 2012 data as i did you will realize that europe’s hydro dose not have the storage volume to support it for 3 winter mounth without the help of natural gas. Closing natural gas in Germany now is stupid and puts the grid at risk.
    Countries in Europe that have big hydro also have legislation that limits the use of hydro in critical moments.
    Countries like Romania, my country , Serbia, Ukraine, France , Norway and Sweden can declare force majeure and ban electricity exports when they are low storage levels that can put at risk there local grid. Romania did this in 2011-2012 winter after a summer drought.
    Norway has 98% hydro production, if they ran out of water they shutdown the hole country :). They will ban export if they feel the need.
    In 2012 winter Germany’s solar and wind fluctuation were supported by Switzerland, Norway and Sweden and they got a good price for it.
    At the end of winter water storage in Switzerland was only 8%.Norway and Sweden will enter this winter with ~20% less water in dams then 2012.

    Sorry for my bad English.

    Data:
    http://www.nordpoolspot.com/Market-data1/Power-system-data/Hydro-Reservoir/Hydro-Reservoir/ALL/Hourly/
    http://www.bfe.admin.ch/themen/00526/00541/00542/00630/index.html?lang=en&dossier_id=00766
    http://www.statnett.no/no/Kraftsystemet/Produksjon-og-forbruk/Kraftflyt-kart-Nordisk/
    http://www.swissgrid.ch/swissgrid/de/home.html

  22. Arthur on Sun, 18th Aug 2013 3:18 pm 

    “Maybe in 5-10 years we will have good numbers…. It’s clear that now solar can handle summer peak load.”

    Chapeau for contradicting yourself in one sentence.

    “But if we look at 2012 data as i did you will realize that europe’s hydro dose not have the storage volume to support it for 3 winter mounth without the help of natural gas.”

    You are ignoring wind energy; the wind keeps blowing during the winter time. No need for three months worth of storage if the renewable strategy is divided over wind and solar.

    My information is that Europe has ca. 18 days worth of storage capacity to cover Europe’s overall electricity needs, but I severely doubt that Europe’s hydro-bassins (read Norway) can deliver the volume and actually release that capacity in 18 days.

    “Closing natural gas in Germany now is stupid and puts the grid at risk.”

    Nobody is contemplating that indeed stupid idea.

    “Norway has 98% hydro production, if they ran out of water they shutdown the hole country . They will ban export if they feel the need.”

    Currently Norway is offering itself to play the role of Europe’s battery pack, no doubt to secure income for after the end of the oil age.

    Here is a German professor outlining how a European hydro storage strategy could actually work (in English):

    http://deepresource.wordpress.com/2013/06/13/norway-europes-green-battery/

  23. sandu on Sun, 18th Aug 2013 7:34 pm 

    You make basic mistakes about the electrical grid and confuse the technical facts with what is theoretically possible and will be implemented in the next 30 years.

    Most large dams go from 0% to 100% water storage in 2-3 years. Norway can’t export every year at the levels of 2012.

    Yes, solar continues to produce in winter and most of wind production is in winter but total production this is not the problem here. Our problem is peak winter capacity and with more solar and wind in the European grid we need more of it but we are shutting it down because is uneconomical.
    In winter solar production peak no longer match load peak quite the reverse happens, and you get those days (1 in 3) when wind drops at the same time with solar.
    This is why we will have massive price spike this winter. Don’t forget UK has already has a capacity problem and those 3GW of interconnects will send power one way. (europe to uk)

    I agree with you that solar and wind are viable in the grid and will continue to replace fossil fuels , but for the moment are closing the wrong power plants.