The problem is mankind presently does not possess the technology to store energy for larger cities. We don't have the materials nor the technology. We will, I am pretty sure at some stage in the future but we don't right now. The other issue is the rapid increase in transmission capacity to go from centralised (hub and spoke generation to load) to a spider web (distributed generation and distributed load). The analysis should always be at the consumer level, not at the point of generation. For example if you look at average wholesale prices in Australia they have indeed come down. The prices consumers pay has gone through the roof.
Until we have adequate storage we also need to double generation capacity (gas/nuclear/coal) as backups when wind and solar don't work. I won't pretend I'm across the data in your analysis but everything has gone up, especially power prices in almost every country and not by a little bit. When you have to double generation capacity in this bridging period, I don't accept that prices have come down, especially at the consumer level.
Hi Joachim, Allow me to disagree with you. Your comment is flawed because it focuses on wholesale costs when surely what matters to society and the consumer is the total costs.
I wrote a White Paper on this a year ago.
"The total cost of electricity is only marginally affected in
the early phases of the rollout of renewables. The system
can accommodate the marginal new production without
significantly reducing other production sources. However,
as intermittent renewable energy becomes a larger share
of electricity, other generative assets must step back to
give room for renewable electricity. However, since the
renewables are intermittent, their capacity factors are
low and very volatile, so the large incumbent baseload
capacities must be on standby to compensate for when
the sun is not shining, or the wind is now blowing. This
adds to system costs.
Beyond a certain point, usually around a share of 30%,
the cost to a nation’s electricity system always increases
with higher shares of variable renewable energy, such as
wind and solar8
. The reasons include but are not limited
to low power density and efficiency, intermittency and
I know about these rising costs above a certain point. But the tipping point depends heavily on the country and the kind of backup power used.
To be clear, I think we need to focus much more on nuclear power and keep some peaker gas as backup to renewables. To me, the ideal power grid is one third nuclear, one third renewables and one third CCGT with carbon capture.
I agree. The idea of 100% renewable power is bonkers, and natural gas is highly underrated. It will be needed in the decades ahead before nuclear power is built out.
A point that is often overlooked is the expectation that renewable projects cannot actually replace or stand-in for older existing electricity generation. Each MW of solar or wind capacity can only operate when the sun shines or the wind blows. So the legacy facilities are still required to generate for demand in the evenings and still wind periods.
The good news is that the usage of carbon based fuels is reduced (less oil, coal and gas used) whenever the sun is shining and the wind blowing (variable costs are reduced pr kW), however the capital costs and investments in facilities and transmission are additive to the country electricity infrastructure. As this capital requires a return that must come from the consumer or the government. Overall higher electricity prices are the world-wide result of the huge investments in renewable infrastructure.
But it only ends up higher if the amortized capital costs end up higher than the marginal/variable cost of fuel. And as the article shows that's not the case - renewables are cheaper.
And with the 90%+ fall in the price of batteries, energy storage is now more than cheap enough to be deployed at scale. (And is in places like Florida & California.)
In principle, I agree. In practice, the principle is flawed.
But I mean this specifically as referred to Germany, my country. Here, we not only have charming phenomenon called Dunkelflaute. Meaning, those weeks in winter when neither the sun shines, nor the wind blows. We also have the equally ominous Hellbrise where there is too much solar and wind energy being generated.
The problem for the latter is sub-zero market costs for electricity, reducing equipment ROI to minus, or (and this is how Germany did it, to a cost of over €20 bn in 2024), handing the bill to the taxpayer.
And a Dunkelflaute means sky-hi costs, unless you can import cheap nuclear power from abroad.
The crucial word is system costs. They're all that matter, because they include transmission and storage. Please don't discuss the costs of power generation if you're not including the system costs.
The problem with the cost of electricity from oil and gas is that it is at the mercy of American power politics. Fortunately, the wind and the sun are not, or at least not yet.
p 7 ‘The periods of greater wind and solar power generation are, to an increasing extent, time bands with lower hourly electricity prices’.
Most will be asleep when that generation happens. And for those uninformed believers who’d now like to recite the surmon ‘EU nations will simply connect their electricity cables’...
European interconnection, although at a fraction of the possible max, already produces huge problems. For the Norwegians for instance, who are considering cutting elec ties in 2026, and for other Nordics. The UK, another renewable energy ‘powerhouse’ (pun intended naturally) has now twice escaped a massive black out in the past few months and at one moment last year paid 50 x the average rate for (emergency) electricity from the continent.
Cheers and thanks.
p 8 ‘assuming that natural gas prices remain at their current levels’
The IEA expects gas prices of Europe’s main supplier the US to grow by about 30%.
p 8 The last paragraph is just a delicious dinner of uncertainties and technologies that still have to be invented, scaled and made economical. Till then, the bank advises, pump pump pump. Not fuel but money into the EU economy. (Keynes lives off of climate change these days just like leftist academics in need of a new battering ram to critique capitalism adopted climate change (fear) with fervour in the 90s.
And the EU will (and already is) borrow(ing) to heed such advice. As it eagerly creates tradeable EU assets through the back door as most voters resist monetary unity.
So:
1 The whole renewable model operates on massive subsidies which distort everything. Fossil fuel generation obviously also receives subsidies. To ensure energy security (which renewables undermine), and to promote a huge industry with an outsized impact on employment and productivity.
A large share though of annual global fossil subsidies are handed out in EM nations to provide citizens with some of the basics: fuel / cooking oil.
The EU investment bank has ended financing fossil projects in EM - even natural gas. Babbling about more private solar panels for EM but obviously the real effect (no models, proxies, estimations or assumptions needed here) is that Indian, Pakistani, Tanzanian etc women will cook on dung or wood for longer. A few million die annually of the related cancers and other respiratory diseases.
Then again: any decent religion needs sacrifices. The difference is that todays DM believers don’t sacrifice themselves. (Just like they prefer others to sign up for the military to 'protect NATOs south eastern flank from Putin'. Who's still in the east of UA...).
2 Renewables necessitate a 3 x build out of wind mills or solar. Therefore the grid needs to massively expand, be stabilized and maintained. Those new and repeating costs are not in the electricity price based on renewable dominance.
3 Have fossil fueled backup power plants been closed? Or do they remain in place to provide back up? Meaning they have less opportunity to be productive and make money let alone a profit. And their maintenance costs do not decline. In fact lower utilization of those power plants tends to come wth higher maintenance costs vs maintenance costs at full utilization.
4 While the EU frantically points at foreign evil doers to explain EU voter discontent, the EU itself, through it's many carbon related policies and caps (which are screwed tighter each year by a few percentage points) produces the upheaval it attributes to others\' bad intentions.
Where London is pushing out its prolls from the city center via ULEZ, the EU is on course of creating an EU wide proll-free flying zone (give them some time and forgive me my hyperbole. I'm just returning the favour).
As one of the most pronounced and denounced Vehicles-of-Sin EU aviation also has a carbon cap. There to since 2021 the annual reduction is increased. Until finally, of course, all plebeians are squeezed out and ‘affordable aviation’ is understood in a certain way by a certain group of people. For more on middle class frequent flyers coming together (all 80.000 of them) to discuss the evils of frequent flying read the article by a climate-friendly though realist scientist:
The silliest of all: for decades the EU has simply been exporting CO2 emissions abroad including the solid blue collar jobs that come with them. And the productivity that is tied to heavy industry, manufacturing, chemicals and other industries-for-sinners. A job there has a much more significant impact on productivity than the average marketer, economist or barista, and typically produces four jobs elsewhere. Now Europe buys the products it used to make itself abroad where relatively more and dirtier energy is used to produce them.
Now the incredibly wise EU looks for ways to tax dirty foreign products...
What silly priests this climate religion has.
Then again, perhaps the objectives of the EU high priests are a bit different from those of the believers. The EU high priests wants to produce EU assets while the believers want to be saved.
Let there be light
Mike Hulne, one of the most interesting climate scientists, who (now) looks at it (at us) though a philosophical, sociological and theological lens, last week wrote this piece on his transformation (scientific, not religious) since the eighties:
From Idealism to Realism
Mike Hulme, a top climate scientist, shares his journey
Part 1: Don Quixote read too much chivalric prose and became the self-anointed delusional saviour of Spain, charging at windmills. While the Bank of Spain charges windmills with planet- consumer- and industry saving power(s). Its folly is not that it read too much but that it read too little.
A serious study looks at the whole landscape in which this Spanish miracle is supposedly happening. It would then (also) list as references Smil, Michaud, Mills c.s. But it (obviously) doesn’t. Mind you, both Smil and Michaud are in favor of a wholesale energy transition but they have come to the conclusion that it is technically not feasible. (And especially Michaud is attacked fiercely by energy trans believers, though they mute their aggression when he asks them for a public debate).
The BoS study proposes to take renewable energy as the dominant electricity price setter, not fossils. And since spot pricing now happens at the margin it looks nice. But since fossil fuel generation remains necessary as backup, this is basically throwing a veil over the true cost of electricity generation and especially over the cost of energy security.
You can increase renewables’ share, that’s just a matter of investment. Roughly you need 3 x the generation capacity to match fossil generation. Apart from causing a CO2 bomb for decades, that’s not very economical. Especially since solar supplies 12 hour p day (at the equator) and wind is max during the colder months), And the need for fossil backup is not going away nor can it decrease.
The BoS study of course relies on models, proxies, estimations and assumptions. That's ok since at least that way the study corresponds neatly with climate science. But they look at renewable penetration without the further consequences of that. And the EU ETS is in the current price which is similar to putting your thumb on the scale - and each year the EU pushes a little harder so annually prices of fossil generation rise, entirely caused by an artificial effect).
p 2 ‘As a result, when these technologies supply electricity to the grid – primarily in the central hours of the day – they tend to displace a significant portion of other energy sources’.
It’s clear to all that solar energy only produces power when demand is lowest. The (demand) off hours typically cover our working day and the whole weekend.
p 2 ' In addition, given the current limited possibilities for storing electricity'.
The understatement here is so generous the unsuspecting reading would think it's UK renewable energy study that's discussed here.
p 2 ‘Second, the cost structure of wind and solar technologies differs from that of fossil fuel-based sources.5 Specifically, wind and solar technologies have very low marginal costs, whereas those of fossil fuel-based technologies are proportional to the price of the commodities needed to operate them. Consequently, the wholesale market price is significantly different when it reflects the marginal cost of fossil fuels compared to when renewable production is sufficient to meet demand and the price therefore reflects very low marginal costs’.
Naturally religious works say miracles exist. But at least the Bible does not try to prove them. This study however…
p 4 'in traditional day-ahead market determinants, i.e. the prices of natural gas and CO2 emission allowances’.
You can curb prices, studies etc in the preferred direction if you apply ‘CO2 emission allowances’.
p 6 'By contrast, an equivalent increase in the share of renewables would have a significant impact if it can displace not only the least efficient plants, but also fossil fuel technologies as a whole, in which case the contribution of renewable energies would bring down wholesale electricity prices to zero.12'
A corresponding passage in the Bible would be discussing eternal life while Don Quixote would be busy convincing Sancho Panza that they had just defeated their mortal enemies in the shape of wind mills.
Poor down to earth Sancho. His contemporary level headed peers are publicly ridiculed, insulted, and put away as science deniers. Anybody doubting what Sancho would be voting these days? Of course not. He certainly is in the bracket deemed unsavory and dangerous to democracy by the Thierry 'We did it in Romania and we'll do it in Germany' breton's of his world.
The problem is mankind presently does not possess the technology to store energy for larger cities. We don't have the materials nor the technology. We will, I am pretty sure at some stage in the future but we don't right now. The other issue is the rapid increase in transmission capacity to go from centralised (hub and spoke generation to load) to a spider web (distributed generation and distributed load). The analysis should always be at the consumer level, not at the point of generation. For example if you look at average wholesale prices in Australia they have indeed come down. The prices consumers pay has gone through the roof.
Until we have adequate storage we also need to double generation capacity (gas/nuclear/coal) as backups when wind and solar don't work. I won't pretend I'm across the data in your analysis but everything has gone up, especially power prices in almost every country and not by a little bit. When you have to double generation capacity in this bridging period, I don't accept that prices have come down, especially at the consumer level.
Hi Joachim, Allow me to disagree with you. Your comment is flawed because it focuses on wholesale costs when surely what matters to society and the consumer is the total costs.
I wrote a White Paper on this a year ago.
"The total cost of electricity is only marginally affected in
the early phases of the rollout of renewables. The system
can accommodate the marginal new production without
significantly reducing other production sources. However,
as intermittent renewable energy becomes a larger share
of electricity, other generative assets must step back to
give room for renewable electricity. However, since the
renewables are intermittent, their capacity factors are
low and very volatile, so the large incumbent baseload
capacities must be on standby to compensate for when
the sun is not shining, or the wind is now blowing. This
adds to system costs.
Beyond a certain point, usually around a share of 30%,
the cost to a nation’s electricity system always increases
with higher shares of variable renewable energy, such as
wind and solar8
. The reasons include but are not limited
to low power density and efficiency, intermittency and
thus backup/storage requirement, low-capacity factors,
interconnection costs, and material and energy costs. The
IEA confirmed in December 2020 that “…the system value
of variable renewables such as wind and solar decreases
as their share in the power supply increases”"
The paper can be accessed here: https://www.cworldwide.com/media/vpqccp4a/the-struggle-to-achieve-net-zero-emissions.pdf
I know about these rising costs above a certain point. But the tipping point depends heavily on the country and the kind of backup power used.
To be clear, I think we need to focus much more on nuclear power and keep some peaker gas as backup to renewables. To me, the ideal power grid is one third nuclear, one third renewables and one third CCGT with carbon capture.
I agree. The idea of 100% renewable power is bonkers, and natural gas is highly underrated. It will be needed in the decades ahead before nuclear power is built out.
100%. I remember Doomberg talking about natural gas as a bridge fuel until nuclear really takes over.
A point that is often overlooked is the expectation that renewable projects cannot actually replace or stand-in for older existing electricity generation. Each MW of solar or wind capacity can only operate when the sun shines or the wind blows. So the legacy facilities are still required to generate for demand in the evenings and still wind periods.
The good news is that the usage of carbon based fuels is reduced (less oil, coal and gas used) whenever the sun is shining and the wind blowing (variable costs are reduced pr kW), however the capital costs and investments in facilities and transmission are additive to the country electricity infrastructure. As this capital requires a return that must come from the consumer or the government. Overall higher electricity prices are the world-wide result of the huge investments in renewable infrastructure.
But it only ends up higher if the amortized capital costs end up higher than the marginal/variable cost of fuel. And as the article shows that's not the case - renewables are cheaper.
And with the 90%+ fall in the price of batteries, energy storage is now more than cheap enough to be deployed at scale. (And is in places like Florida & California.)
Energy storage is still way too expensive to be deployed at scale.
In principle, I agree. In practice, the principle is flawed.
But I mean this specifically as referred to Germany, my country. Here, we not only have charming phenomenon called Dunkelflaute. Meaning, those weeks in winter when neither the sun shines, nor the wind blows. We also have the equally ominous Hellbrise where there is too much solar and wind energy being generated.
The problem for the latter is sub-zero market costs for electricity, reducing equipment ROI to minus, or (and this is how Germany did it, to a cost of over €20 bn in 2024), handing the bill to the taxpayer.
And a Dunkelflaute means sky-hi costs, unless you can import cheap nuclear power from abroad.
The crucial word is system costs. They're all that matter, because they include transmission and storage. Please don't discuss the costs of power generation if you're not including the system costs.
Not to worry. I will address that next week in the case of California.
The problem with the cost of electricity from oil and gas is that it is at the mercy of American power politics. Fortunately, the wind and the sun are not, or at least not yet.
Give Donald Trump and Elon Musk some time 😂
https://youtu.be/hjdMYyjnmks
P 2
p 7 ‘The periods of greater wind and solar power generation are, to an increasing extent, time bands with lower hourly electricity prices’.
Most will be asleep when that generation happens. And for those uninformed believers who’d now like to recite the surmon ‘EU nations will simply connect their electricity cables’...
European interconnection, although at a fraction of the possible max, already produces huge problems. For the Norwegians for instance, who are considering cutting elec ties in 2026, and for other Nordics. The UK, another renewable energy ‘powerhouse’ (pun intended naturally) has now twice escaped a massive black out in the past few months and at one moment last year paid 50 x the average rate for (emergency) electricity from the continent.
Cheers and thanks.
p 8 ‘assuming that natural gas prices remain at their current levels’
The IEA expects gas prices of Europe’s main supplier the US to grow by about 30%.
https://www.eia.gov/outlooks/steo/report/natgas.php#:~:text=2.7%20Bcf/d.-,Natural%20gas,-prices%0AIn%20our
p 8 The last paragraph is just a delicious dinner of uncertainties and technologies that still have to be invented, scaled and made economical. Till then, the bank advises, pump pump pump. Not fuel but money into the EU economy. (Keynes lives off of climate change these days just like leftist academics in need of a new battering ram to critique capitalism adopted climate change (fear) with fervour in the 90s.
And the EU will (and already is) borrow(ing) to heed such advice. As it eagerly creates tradeable EU assets through the back door as most voters resist monetary unity.
So:
1 The whole renewable model operates on massive subsidies which distort everything. Fossil fuel generation obviously also receives subsidies. To ensure energy security (which renewables undermine), and to promote a huge industry with an outsized impact on employment and productivity.
A large share though of annual global fossil subsidies are handed out in EM nations to provide citizens with some of the basics: fuel / cooking oil.
The EU investment bank has ended financing fossil projects in EM - even natural gas. Babbling about more private solar panels for EM but obviously the real effect (no models, proxies, estimations or assumptions needed here) is that Indian, Pakistani, Tanzanian etc women will cook on dung or wood for longer. A few million die annually of the related cancers and other respiratory diseases.
Then again: any decent religion needs sacrifices. The difference is that todays DM believers don’t sacrifice themselves. (Just like they prefer others to sign up for the military to 'protect NATOs south eastern flank from Putin'. Who's still in the east of UA...).
2 Renewables necessitate a 3 x build out of wind mills or solar. Therefore the grid needs to massively expand, be stabilized and maintained. Those new and repeating costs are not in the electricity price based on renewable dominance.
3 Have fossil fueled backup power plants been closed? Or do they remain in place to provide back up? Meaning they have less opportunity to be productive and make money let alone a profit. And their maintenance costs do not decline. In fact lower utilization of those power plants tends to come wth higher maintenance costs vs maintenance costs at full utilization.
4 While the EU frantically points at foreign evil doers to explain EU voter discontent, the EU itself, through it's many carbon related policies and caps (which are screwed tighter each year by a few percentage points) produces the upheaval it attributes to others\' bad intentions.
Where London is pushing out its prolls from the city center via ULEZ, the EU is on course of creating an EU wide proll-free flying zone (give them some time and forgive me my hyperbole. I'm just returning the favour).
As one of the most pronounced and denounced Vehicles-of-Sin EU aviation also has a carbon cap. There to since 2021 the annual reduction is increased. Until finally, of course, all plebeians are squeezed out and ‘affordable aviation’ is understood in a certain way by a certain group of people. For more on middle class frequent flyers coming together (all 80.000 of them) to discuss the evils of frequent flying read the article by a climate-friendly though realist scientist:
Cop out in Dubai https://tinyurl.com/4frafjv6 )
The silliest of all: for decades the EU has simply been exporting CO2 emissions abroad including the solid blue collar jobs that come with them. And the productivity that is tied to heavy industry, manufacturing, chemicals and other industries-for-sinners. A job there has a much more significant impact on productivity than the average marketer, economist or barista, and typically produces four jobs elsewhere. Now Europe buys the products it used to make itself abroad where relatively more and dirtier energy is used to produce them.
Now the incredibly wise EU looks for ways to tax dirty foreign products...
What silly priests this climate religion has.
Then again, perhaps the objectives of the EU high priests are a bit different from those of the believers. The EU high priests wants to produce EU assets while the believers want to be saved.
Let there be light
Mike Hulne, one of the most interesting climate scientists, who (now) looks at it (at us) though a philosophical, sociological and theological lens, last week wrote this piece on his transformation (scientific, not religious) since the eighties:
From Idealism to Realism
Mike Hulme, a top climate scientist, shares his journey
https://tinyurl.com/ypb3hdt6
And here he looks at us:
The Cultural Functions of Climate | Mike Hulme
https://www.youtube.com/watch?v=y34dOOThOsg&t=501s
Part 1: Don Quixote read too much chivalric prose and became the self-anointed delusional saviour of Spain, charging at windmills. While the Bank of Spain charges windmills with planet- consumer- and industry saving power(s). Its folly is not that it read too much but that it read too little.
A serious study looks at the whole landscape in which this Spanish miracle is supposedly happening. It would then (also) list as references Smil, Michaud, Mills c.s. But it (obviously) doesn’t. Mind you, both Smil and Michaud are in favor of a wholesale energy transition but they have come to the conclusion that it is technically not feasible. (And especially Michaud is attacked fiercely by energy trans believers, though they mute their aggression when he asks them for a public debate).
The BoS study proposes to take renewable energy as the dominant electricity price setter, not fossils. And since spot pricing now happens at the margin it looks nice. But since fossil fuel generation remains necessary as backup, this is basically throwing a veil over the true cost of electricity generation and especially over the cost of energy security.
You can increase renewables’ share, that’s just a matter of investment. Roughly you need 3 x the generation capacity to match fossil generation. Apart from causing a CO2 bomb for decades, that’s not very economical. Especially since solar supplies 12 hour p day (at the equator) and wind is max during the colder months), And the need for fossil backup is not going away nor can it decrease.
The BoS study of course relies on models, proxies, estimations and assumptions. That's ok since at least that way the study corresponds neatly with climate science. But they look at renewable penetration without the further consequences of that. And the EU ETS is in the current price which is similar to putting your thumb on the scale - and each year the EU pushes a little harder so annually prices of fossil generation rise, entirely caused by an artificial effect).
p 2 ‘As a result, when these technologies supply electricity to the grid – primarily in the central hours of the day – they tend to displace a significant portion of other energy sources’.
It’s clear to all that solar energy only produces power when demand is lowest. The (demand) off hours typically cover our working day and the whole weekend.
p 2 ' In addition, given the current limited possibilities for storing electricity'.
The understatement here is so generous the unsuspecting reading would think it's UK renewable energy study that's discussed here.
p 2 ‘Second, the cost structure of wind and solar technologies differs from that of fossil fuel-based sources.5 Specifically, wind and solar technologies have very low marginal costs, whereas those of fossil fuel-based technologies are proportional to the price of the commodities needed to operate them. Consequently, the wholesale market price is significantly different when it reflects the marginal cost of fossil fuels compared to when renewable production is sufficient to meet demand and the price therefore reflects very low marginal costs’.
Naturally religious works say miracles exist. But at least the Bible does not try to prove them. This study however…
p 4 'in traditional day-ahead market determinants, i.e. the prices of natural gas and CO2 emission allowances’.
You can curb prices, studies etc in the preferred direction if you apply ‘CO2 emission allowances’.
p 6 'By contrast, an equivalent increase in the share of renewables would have a significant impact if it can displace not only the least efficient plants, but also fossil fuel technologies as a whole, in which case the contribution of renewable energies would bring down wholesale electricity prices to zero.12'
A corresponding passage in the Bible would be discussing eternal life while Don Quixote would be busy convincing Sancho Panza that they had just defeated their mortal enemies in the shape of wind mills.
Poor down to earth Sancho. His contemporary level headed peers are publicly ridiculed, insulted, and put away as science deniers. Anybody doubting what Sancho would be voting these days? Of course not. He certainly is in the bracket deemed unsavory and dangerous to democracy by the Thierry 'We did it in Romania and we'll do it in Germany' breton's of his world.