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.
Homeowner, in the bluest state in the nation with my solar, the system has problems. LAfter the expensive investment that was suppose to pay for itself within 10 years. The system cannot be expanded because it's already obsolete.
The worst is the utility company that enjoys a huge discount when they tap into my solar. While I, the one who invested, pays premium prices when I need the grid.
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
My experience, a humble
Homeowner, in the bluest state in the nation with my solar, the system has problems. LAfter the expensive investment that was suppose to pay for itself within 10 years. The system cannot be expanded because it's already obsolete.
The worst is the utility company that enjoys a huge discount when they tap into my solar. While I, the one who invested, pays premium prices when I need the grid.