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Old 04-20-2016, 08:06 AM   #21
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Wow. [mod edit] Since you missed it, here's the subtitle:

Record clean energy investment outpaces gas and coal 2 to 1

The article isn't about energy output or production or market share. Just investment.

Why am I even wasting pixels here? *headdesk*
Hey, you didn't say we were supposed to read the article before commenting on it. That's not how we do things.
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Old 04-20-2016, 08:21 AM   #22
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Originally Posted by dixonge View Post
Wow. [mod edit] Since you missed it, here's the subtitle:

Record clean energy investment outpaces gas and coal 2 to 1

The article isn't about energy output or production or market share. Just investment.

Why am I even wasting pixels here? *headdesk*
Well, since the subsidy market is politically skewed to heavily favour wind and solar investments, what was your point? Anyone who has been on this site long enough should know that people here understand why those investments are up and won't easily fall for misleading headlines.
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Old 04-20-2016, 08:24 AM   #23
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As nash has pointed out, renewables provide 7% of US energy. The big "but" is there is about 300,000 people working in that industry.

The nuclear and fossil fuel industry provide 93% and have at max, 100,000 workers in that industry.

Here in Grapetown, which is in coal country, I pay less than 7 cents/kwh.

Renewables may provide supplemental power, but they will never be able to provide the kva demand that a manufacturing economy requires. Maybe there are those who do not want a manufacturing economy.

As a volunteer local zoning board member, a lot of the "subsidies" provided to industry whether it be petrochemicals, oil, steel are the same as those offered to housing and shopping malls. Tax incremental funding (TIF), is like a depreciation charge, given to investors to build sewage, roads and utilities to a site to enable construction and operation of the facility. A plant or shopping center with 1200 employees or customers will not make sense if the road into the plant can only handle cars and no delivery trucks or only 3 bathrooms. One may not agree that governmental bodies do this kind of thing, but they do it here so the next county,city or state gets the facility. And collects the income taxes.
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Old 04-20-2016, 08:31 AM   #24
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Adding wind/solar is a positive in many ways, but it could be debated as to whether it makes economic sense to push it now, or wait for it to get better or (lots of questions if you think about it).
-ERD50
I'm not sure you arrive at a point where it ever makes economic sense without pushing it first.

To the end-use customer, renewable power is a perfect substitute for power generated by any other source. On purely economic terms, there's no reason to choose it over electricity generated any other way. So nobody will.

And if nobody demands a special brand of power, there's little reason to build a special brand of power unless those technologies are far cheaper right out of the gate, with no benefits from economies of scale. That's a huge, some might argue impossible, lift to get a new infrastructure technology off the ground.

That's also a reason not to do it at all. And ordinarily, that reason would be the final word.

In this case, though, there's good reason to believe that most of our power generation technologies impose what economists call "externalities." Said in plain English, fossil fuel burning generates costs for society that aren't represented in any market prices.

Those costs come in the form of pollution that producers can dump into the air for free. And because they can dump their waste for free, the price they can charge for their product is lower than the true cost of production. In that sense, free dumping permits are a huge subsidy to fossil fuel burning technology.

If fossil fuel companies had to pay to dump their emissions, their prices would be higher and they'd look a lot less competitive versus "clean" alternatives.

So the only reason to push renewable technologies is because you believe the externalities created by fossil fuel burning are real. And the only way you get the investment and scale necessary to compete on economic terms is to "push" clean technology in some way. Without that push, it never gets off the ground.
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Old 04-20-2016, 08:33 AM   #25
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...
... w/o storage, the intermittent nature takes a toll when you start getting to 10, 20, maybe 30% of average production being wind/solar? To have that much average, you end with peaks that probably can't be absorbed, so can't be sold. So the price starts going up again (to recoup the investment with less sales). And storage costs $ and wastes some of the energy.

That doesn't mean wind/solar aren't viable, it's just an issue when you start hitting higher average rates.
I saw an article on this just today, pretty good, IMO....hmmmm, not finding the link offhand, will try later.

-ERD50
Here's the link:

How cheap does solar power need to get before it takes over the world? - Vox

and some quotes:

Quote:
Thanks to a little-discussed phenomenon known as "value deflation," the electricity generated by solar panels gets less and less valuable as more panels come online. ...

The trouble comes when you keep adding more and more solar panels to a given grid. As that happens, the wholesale price of electricity keeps falling during sunny hours. And each additional solar panel becomes that much less economically valuable.
Their chart seems to indicate that there is a crossover for solar when it produces about 12% of the averages power. If I'm reading it right, solar power is more valuable than average at lower %, I assume because it is generally producing near the peaks of demand, offsetting high cost peaker plants. Then, at ~ 12%, the average price they figure solar can charge starts dropping below the overall average, because at that point, some of that peak power will be wasted, or competes with cheaper base load power. In that case, I think they are projecting that the utility might be ramping down their coal plants a bit, if a sunny day is forecasted?

We are far from 12% in the US (~ 0.4%), so not an issue for a long time here.

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Old 04-20-2016, 08:44 AM   #26
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Adding wind/solar is a positive in many ways, but it could be debated as to whether it makes economic sense to push it now, or wait for it to get better or (lots of questions if you think about it).
-ERD50
I'm not sure you arrive at a point where it ever makes economic sense without pushing it first. ...

See, I said it could be debated!

I actually agree with all you posted, but I knew if I stated it unequivocally one way or the other, it would get challenged from one side or the other, and I was really trying to stay more focused on whatever it was the OP was getting at (and I would appreciate to hear back from him on that - that article could be taken in many different directions, and it has).

And I do think that some sort of 'push' is needed to credit the reduced health issues that solar/wind have over coal especially, and to a lesser extent NG. Since those health costs don't show up on our bill (probably the best way to do it IMO), something should be done to credit solar/wind for that benefit.

The flip side, as my linked article points out - at higher levels of solar/wind, it gets more expensive. You either waste it or require $ (and probably dangerous) storage, and storage will waste some in the conversions.

-ERD50
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Old 04-20-2016, 08:51 AM   #27
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The nuclear and fossil fuel industry provide 93% and have at max, 100,000 workers in that industry.
.

You may want to recheck your numbers. Exxon Mobil alone had over 75,000 employees. If you're talking only those directly involved in petroleum/gas extraction, it's about 178,000 employees for the industry in the US.

http://www.bls.gov/iag/tgs/iag211.htm#workforce


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Old 04-20-2016, 08:55 AM   #28
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Thanks to a little-discussed phenomenon known as "value deflation," the electricity generated by solar panels gets less and less valuable as more panels come online. ...

The trouble comes when you keep adding more and more solar panels to a given grid. As that happens, the wholesale price of electricity keeps falling during sunny hours. And each additional solar panel becomes that much less economically valuable.
I don't think this is a huge problem which becomes clear once you dive into how our power markets work.

For the large parts of the country where power generation is still regulated as a monopoly business there's no issue whatsoever. If you want a solar plant, you build a solar plant. You can then add the cost of construction to your utility ratebase where you earn an allowed return on that investment. As a regulated monopoly, you simply request power prices that allow you to earn your return. The price of power on the wholesale market doesn't even factor into the equation.

In parts of the country where power generation has been deregulated, they've already separated out the markets into various components. One of those is for energy (what you get paid for producing). And one is for capacity (what you get paid for being able to produce). It's the second part where you earn your return on captial.

Producers bid into the capacity market to stand ready to produce. The capacity payments provide your return on investment for the physical plant. When it comes time to produce energy for the real time market, you bid in a price that is governed by your marginal cost. Solar power plants bid in zero. Fossil plants bid in their fuel cost, and so on.

If the energy market clears at zero, the fossil plants don't run and they just get their capacity payment. If the fossil plants do run, they get a capacity plus energy payment that compensates them for their marginal costs of running the plant.
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Old 04-20-2016, 08:56 AM   #29
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Those costs come in the form of pollution that producers can dump into the air for free. And because they can dump their waste for free, the price they can charge for their product is lower than the true cost of production. In that sense, free dumping permits are a huge subsidy to fossil fuel burning technology.

If fossil fuel companies had to pay to dump their emissions, their prices would be higher and they'd look a lot less competitive versus "clean" alternatives.
It's easy to cherry pick the negatives, but what about all the positives that you ignored?

Modern societies using fossil fuels have saved many times more lives than the alternative scenario where they are not used. Just one example...modern medicine would not exist without fossil fuels that provide cheap and reliable energy. The more modern a society is, the longer the life expectancy of the people becomes.

No one in a third world country posts on an early retirement forum unless they have retired there from a first world country that owes its existence in great part due to the benefits of fossil fuels.

If you get rid of heating fuel and the forests of the world will disappear in less than a year when people cut down trees to heat their homes.

If you get rid of motor vehicle engines then society is reduced to subsistence farming where a good portion of the food grown is used to feed working livestock.
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Old 04-20-2016, 09:23 AM   #30
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It's easy to cherry pick the negatives, but what about all the positives that you ignored?
I'm not cherry picking negatives. I'm simply talking about market economics.

The positive you mention are all represented on the demand side of the market. People demand electricity for all the good reasons you mention.

But supplying that demand isn't free. Producers need to charge for things like fuel, and labor, and physical plant so they charge a price. The price that matches demand with supply determines how much electricity is produced and consumed.

Now what happens if for some reason the costs of production aren't fully borne by either producers or customers of electricity but by some third party? In that case the producers can charge less to generate electricity because their costs are lower. And because prices are lower people are able to buy more electricity.

So we end up producing and consuming more than we would if the full costs of production were priced in. That also means that the costs borne by that third party are higher than they otherwise would be because there's no market mechanism to keep them in check.

Also, if an alternative producer wanted to enter that market but wasn't able to offload some of their costs on a third party in the same way, they'd be at a significant disadvantage.

This is all pretty straight forward economics. And has no political leaning one way or another.

Whether or not you believe burning fossil fuels creates such external costs is where the politics comes in.
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Old 04-20-2016, 09:43 AM   #31
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Whether or not you believe burning fossil fuels creates such external costs is where the politics comes in.
The market and govt regulations are putting a price on the costs...emission controls now mean cars are dozens or hundreds of times cleaner than those built decades ago. Pollution regulations are stricter, rivers and lakes are cleaner (when is the last time a river caught fire?), people are recycling, using less, buying "greener" products, etc. Everyone one of those steps costs money either in higher taxes or higher product cost and the majority of society has accepted those costs.

However, right or wrong, there will always be those who don't think the steps go far enough.
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Old 04-20-2016, 10:11 AM   #32
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..........
However, right or wrong, there will always be those who don't think the steps go far enough.
Yes, and there will always be those who never thought any steps were necessary in the first place.
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Old 04-20-2016, 10:19 AM   #33
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The flip side, as my linked article points out - at higher levels of solar/wind, it gets more expensive. You either waste it or require $ (and probably dangerous) storage, and storage will waste some in the conversions. -ERD50
True that. So many levels of 'break-even'. Just as a rough indication (my situation) where you need to be on a system levelized cost to break even with alternatives.

Retail level without 2nd order effects (say, below 10% wind/solar and/or easy buffering available like dams): around 20 cents per kwh (includes tax).
Wholesale without 2nd order effects: 10 cents per kwh
Break-even wholesale with limited 2nd order effects: 6 cents.
Break-even wholesale with 2nd order effects: all the way down to 0.

And that's only one axis. Then you have subsidies, location (sunny/windy) and interconnection.

Best place to have cheap solar/wind seems to be India for example. You are not displacing current capacity (in many areas there still is nothing), intermittency is no issue (hey, you had nothing before right?) and you have lots of sunshine.

Worst place, dunno. Alaska? or maybe in China next to the three Gorges dam.

It seems that current prices can reach 8 cents/kwh and costs keep going down (for industry-scale). Scale and experience is beautiful. And the way China and India are going the crushing will continue.

According to the article costs drop 25% with each doubling, and doubling happens every two years. In ten years that means we'll be seeing 2 cents/kwh installation costs. Incredible.
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Old 04-20-2016, 10:24 AM   #34
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The concept of externalities was brought home to me when my son was an infant. We lived near a busy road in a country where lead had not been eliminated from gasoline yet. When we went to the US for the summer, we had our routine physicals and found that our baby had dangerously high blood lead. We eventually eliminated paint as the potential source of the lead, and were left with auto exhaust as the only remaining possibility. Our son and every other infant that lived near a busy road in that country were bearing the external cost of that leaded gasoline.

Externalities can seem like made-up abstractions until somebody else's sh!t rolls downhill into your yard and you get to bear the consequences!

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Old 04-20-2016, 10:36 AM   #35
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I don't think this is a huge problem which becomes clear once you dive into how our power markets work. ....
I'm not saying it is a huge problem, it's hard to ferret out the scale of it, especially in an unknown future.

I'm just pointing out the likely effects of large amounts of wind/solar. I don't see how your analysis changes anything in the end. If I build a LOT of solar, and can no longer get peak prices for my kWhrs, that solar looses some of it economic benefit to the end consumer (whether it is 'charged' to the fossil plants or to solar).

You can squeeze that balloon any way you choose, overall it will mean increased costs to the consumer (and/or taxpayer if subsidies need to be included), relative to using the same numbers from a lower level of solar build out. It just doesn't scale quite the same.

It might still be the right thing to do. Some solar being wasted might be an OK price to pay for the overall health benefits. I'm not trying to come to any conclusions, I'm just saying it is an effect, and some of the claims about solar pricing compared to coal might be a bit exaggerated when you get to these levels.

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Old 04-20-2016, 10:43 AM   #36
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The concept of externalities was brought home to me when my son was an infant. We lived near a busy road in a country where lead had not been eliminated from gasoline yet. When we went to the US for the summer, we had our routine physicals and found that our baby had dangerously high blood lead. We eventually eliminated paint as the potential source of the lead, and were left with auto exhaust as the only remaining possibility. Our son and every other infant that lived near a busy road in that country were bearing the external cost of that leaded gasoline.

Externalities can seem like made-up abstractions until somebody else's sh!t rolls downhill into your yard and you get to bear the consequences!
Yup. And the fight to remove lead from gasoline was epic . . . like all such fights tend to be, regardless of how obviously necessary they seem after the fact.
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Old 04-20-2016, 10:45 AM   #37
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I'm not cherry picking negatives. I'm simply talking about market economics. ...
Au contraire... it was the best stretch to make a point (aka cherry pick that I have ever seen).. using that silly logic most manufactured products are cheaper because they don't pay for any emissions that they generate.
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Old 04-20-2016, 11:09 AM   #38
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Au contraire... it was the best stretch to make a point (aka cherry pick that I have ever seen).. using that silly logic most manufactured products are cheaper because they don't pay for any emissions that they generate.
If those emissions generate costs that don't show up in any price, that's exactly right. How could it not be?
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Old 04-20-2016, 11:14 AM   #39
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The concept of externalities was brought home to me when my son was an infant. We lived near a busy road in a country where lead had not been eliminated from gasoline yet. When we went to the US for the summer, we had our routine physicals and found that our baby had dangerously high blood lead. We eventually eliminated paint as the potential source of the lead, and were left with auto exhaust as the only remaining possibility. Our son and every other infant that lived near a busy road in that country were bearing the external cost of that leaded gasoline.

Externalities can seem like made-up abstractions until somebody else's sh!t rolls downhill into your yard and you get to bear the consequences!

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I hope your Son made out OK.

This was a frightening possibility.

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Old 04-20-2016, 11:36 AM   #40
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If I build a LOT of solar, and can no longer get peak prices for my kWhrs, that solar looses some of it economic benefit to the end consumer (whether it is 'charged' to the fossil plants or to solar).
It's probably worth backing up for a minute. I partly misunderstood the argument the researchers were making in your link.

I'd summarize their argument this way: It currently costs far more per KW to build a solar plant than a fossil plant of the same size. Some of that higher capital cost is recovered through higher margins on power sales because solar plants have zero fuel costs. But as you add more solar plants, those margins compress meaning that solar plants recover less of their higher capital costs all else being equal.

And I agree with that. Essentially it's a long way of saying that it currently costs more to build a solar plant than it does to build a different kind of plant. That's well known.

But the costs of building solar plants are falling rapidly. So it's not right to frame this as some kind of static impediment to solar integration. As the capital costs of solar plants come down, so does this effect.

And if solar can get to a level where it's price per KW of installed capacity is roughly equivalent to that of a fossil fuel plant, this issue goes away completely. If not, then solar will remain a more expensive alternative - no question about it.
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