Wind and Solar are Crushing Fossil Fuels

[Gone4Good]

I don't know much about sea levels, but spending money on infrastructure contributes to higher growth.

This sounds a bit like the parable of the broken window where higher growth is assumed to come from breaking, and then replacing, store windows.

In the case of building dykes to protect a city it seems pretty clear to me that activity won't make us richer. They don't increase productivity. They don't enhance the city versus what was there before. Sure, they prevent us from becoming poorer by protecting the city from destruction. But they don't make us richer than we already were. All building dykes does is consume resources that could have been spent on something productive.

Building new power plants is similar, but more complicated. If all we're doing is replacing one power plant with an economically identical power plant we end up no richer for the effort.

Now there's a fair argument that replacing a coal plant with solar plants might make us richer. Solar might be a worthwhile investment regardless of environmental issues because we get zero marginal-cost power thereafter. But it's still hard to see that spending resources replacing existing infrastructure makes us richer than building new, productivity enhancing, infrastructure would.

 

[NW-Bound]

Putting human efforts into renewable energy will divert resources from other activities. GNP may be high, but it means the standard of living will not get higher. This may not be bad at all for developed countries. New homes in the US have been growing larger again, after a short period of shrinking during the Great Recession. Surely, we can live smaller and use less energy if it is more expensive. And the extra money spent on enlarging the homes can go into building new infrastructures for renewable energy.

Renewable energy will cost more. Anybody who claims differently is wrong. Can we afford it? I don't know. As individuals, many of us can afford higher energy cost. We can just spend less elsewhere. The poorer portion of the population will be harder hit.

Most trade-offs start out as a technical problem, then devolve into a political dilemma. This one is no different.

 

[MichaelB]

Not sure it works quite like that.

It absolutely does.

This sounds a bit like the parable of the broken window where higher growth is assumed to come from breaking, and then replacing, store windows.

This is basic economic theory, not storytelling.

Growth measures the change in economic activity, and building infrastructure most certainly does generate economic activity.

Good growth vs bad, wealth creation and what makes us richer is an entirely different discussion, and my earlier post was quite specific. There is absolutely no doubt that additional investment in infrastructure create economic activity, which translates into higher economic growth.

If you want to include other economic or financial measures, such as wealth creation, and add qualitative assessments, such as "good growth", you need to first introduce a framework and agree on a common set of assumptions. That hasn't happened yet on the original topic, so I'm not holding my breath on this.

 

[ERD50]

It absolutely does.

This is basic economic theory, not storytelling.

Growth measures the change in economic activity, and building infrastructure most certainly does generate economic activity.

Good growth vs bad, wealth creation and what makes us richer is an entirely different discussion, and my earlier post was quite specific. There is absolutely no doubt that additional investment in infrastructure create economic activity, which translates into higher economic growth. ...

Can you separate the two? I think all you can say is that any infrastructure spending is an increase in spending, not an increase in growth ("growth" was the term you first used, not "activity").

By your logic, all a company needs to do to grow is spend money?

-ERD50

 

[pb4uski]

Methane is terrible for greenhouse gases. Not sure how it compares to coal though.

But methane is burned one way or the other so you might as well use it to make electricity vs just flaring it. Our co-ops facility produces enough power for ~6,400 households with 5 generators at 5.47c/kwh which happens to be our least expensive source of power. I know that the landfill gas emissions are cleaned and scrubbed before it goes to the generators.

 

[gerntz]

"The real rate of coastal sea-level rise from averaged tide gauge measurements is only about 1.4-1.5 mm/yr (under six inches per century), and that rate hasn’t increased since the late 1920s."

https://wattsupwiththat.com/2016/04/07/nasas-tricky-sea-level-newsletter/

Claims that the rise will increase 10-fold from 6" per century to 5 feet are nothing but unproven alarmism. Even if it doubles to 1 foot per century, there is plenty of time to act.

Some might consider this climate change denying.

 

[Music Lover]

Some might consider this climate change denying.

And others consider the real deniers to be those who choose to ignore the real and verifiable data. NOAA says this:

"The calculated trends for all stations are available as a table in millimeters/year and in feet/century (0.3 meters = 1 foot)."

https://tidesandcurrents.noaa.gov/sltrends/sltrends_station.shtml?stnid=9414290

And this:

"The mean sea level trend is 2.84 millimeters/year with a 95% confidence
interval of +/- 0.09 mm/yr based on monthly mean sea level data from
1856 to 2015 which is equivalent to a change of 0.93 feet in 100 years."

https://tidesandcurrents.noaa.gov/sltrends/sltrends_station.shtml?stnid=8518750

 

[Gone4Good]

It absolutely does.

This is basic economic theory, not storytelling.

Growth measures the change in economic activity, and building infrastructure most certainly does generate economic activity.

Good growth vs bad, wealth creation and what makes us richer is an entirely different discussion, and my earlier post was quite specific. There is absolutely no doubt that additional investment in infrastructure create economic activity, which translates into higher economic growth.

Basic economic theory also includes the possibility of crowding out. That is to say spending on one thing causes other spending not to happen because resources are finite. Prices go up. Interest rates go up. Other investment goes down.

So even if we restrict the conversation to one of pure accounting identities without any concern over whether infrastructure spending leaves us better off, it's not necessarily true that higher spending automatically leads to higher GDP.

And I'm not sure why we'd mention higher GDP unless we're implying that it's making people richer. But you're right, achieving higher GDP where everyone's standard of living is the same or worse is certainly one possible outcome. It's called inflation.

 

[explanade]

Harvard engineering professor on solar power generation costs dropping faster than anticipated.

Cheap Solar Power — The Keith Group

 

[Gone4Good]

And others consider the real deniers to be those who choose to ignore the real and verifiable data. NOAA says this:

Yes, so let's let NOAA interpret that data for us.

There is strong evidence that global sea level is now rising at an increased rate and will continue to rise during this century.

While studies show that sea levels changed little from AD 0 until 1900, sea levels began to climb in the 20th century.

The two major causes of global sea-level rise are thermal expansion caused by the warming of the oceans (since water expands as it warms) and the loss of land-based ice (such as glaciers) due to increased melting.

Records and research show that sea level has been steadily rising at a rate of 0.04 to 0.1 inches per year since 1900. Since 1992, new methods of satellite altimetry (the measurement of elevation or altitude) indicate a rate of rise of 0.12 inches per year. This is a significantly larger rate than the sea-level rise averaged over the last several thousand years.

 

[Totoro]

Harvard engineering professor on solar power generation costs dropping faster than anticipated.

Cheap Solar Power — The Keith Group

Thanks for that link! We're at 3.4 cents per kWH already in the best placed locations. Wow.

The current state of play is captured in three facts:

• The capital cost of industrial (>50 MW) solar PV installations with North-South axis trackers is now about 1,500 $/kW, and contracts for some industrial systems without trackers are getting down to 1,000 $/kW.
• Capacity factors of industrial systems with trackers are reaching just over 30% at the best sites in the US.
• Real world efficiency for commercial PV systems now exceeds 20%.

Let’s now proceed on the assumption that these facts are correct. What does this mean for electricity supply cost?
Assume that an average Capital Change Factor (CCF) is 6%, a low but not unfeasible value, as the risk premium for these facilities has decreased dramatically. (CCF is the ratio of the total annualized cost of capital, spread across debt and equity, divided by capital cost.) At 1,500 $/kW, 6%/year CCF, and 30% capacity factor, electricity cost is 34 $/MWhr

 

[MichaelB]

Can you separate the two? I think all you can say is that any infrastructure spending is an increase in spending, not an increase in growth ("growth" was the term you first used, not "activity").

By your logic, all a company needs to do to grow is spend money?

-ERD50

Can which two be separated? Spending produces activity. When the aggregate value of all activity is greater this period compared with last period, there was growth. This applies to an economy, not a business.

Basic economic theory also includes the possibility of crowding out. That is to say spending on one thing causes other spending not to happen because resources are finite. Prices go up. Interest rates go up. Other investment goes down.

So even if we restrict the conversation to one of pure accounting identities without any concern over whether infrastructure spending leaves us better off, it's not necessarily true that higher spending automatically leads to higher GDP.

You are modeling, based on very specific assumptions. Not like your earlier post where you made a blanket comment about infrastructure investment and growth.

Yes, incremental investment could lead to lower growth, by diverting investment that could be more productive elsewhere. Or course, in an economy that is running below capacity, with a declining employment to population ratio, and with a surplus of savings, my guess would be the infrastructure investment would lead to greater real growth. But, then again, I'm also modeling.

And I'm not sure why we'd mention higher GDP unless we're implying that it's making people richer. But you're right, achieving higher GDP where everyone's standard of living is the same or worse is certainly one possible outcome. It's called inflation.

GDP growth does not necessarily make people "richer". The increased economic activity means incomes rose, but admittedly gives us little idea how the increase was allocated across the population. For that we would need more data and other indicators.

You can argue that infrastructure investment does not contribute any net real new value, but you need to lay out some basic assumptions. Why does this displace other investment resources (labor, capital, resources) when all 3 are in surplus and why does it cause prices to rise when all 3 are suffering from deflationary pressures.

 

[NW-Bound]

Harvard engineering professor on solar power generation costs dropping faster than anticipated.

Cheap Solar Power — The Keith Group

Thanks for that link! We're at 3.4 cents per kWH already in the best placed locations. Wow.

The 3.4c/kWh for solar includes capital costs. Operating cost should be zero, and maintenance cost should also be low. The problem is always how to save that power during sunny hours for later use. As this report acknowleges,

But cheap solar does not deal with the problem of solar power’s intermittency. It does not mean rooftop solar in New England makes sense. It does not magically decarbonize the world. In the long run we need low-carbon dispatchable power in the world’s demand centers. This will require some combination of gas for peaking, storage, and long distance transmission. Lots of the world’s demand is in places where insolation is at least 40% less than in the best locations, which are parts of Mexico, Southern-California, the Mid-East, or Australia.

By the way, I was curious about operating costs for conventional generation methods. I found out that it is 1.2c/kWh for hydro-electric plants, 2.7c/kWh for nuclear, 3.9c/kWh for fossil steam (coal), and 4.3c/kWh for gas turbine. The above costs include operation, fuel, and maintenance, but not capital costs. Source: eia.gov.

So, solar cost is very good for some locations. All we need now is an inexpensive way to store it. Storage will drive up the cost.

 

[Totoro]

I know it was. Just surprised that costs of solar could already be so low. And that's today.

This is a novel approach to energy storage I didn't realize could work:

It takes about 2 t-CO2 and 40 GJ of H2 to make 1000 liters of gasoline using a process like Exxon Methanol-to-Gasoline. If we can get CO2 from the air at 125 $/t-CO2 then the idea of making fuels at prices of order 1 $/L looks plausible over the next few decades.

next few decades, I know, just an interesting concept.

 

[Totoro]

What would the cost be of a huge cable running from say Europe to China?

The sun always shines somewhere .. a new kind of silk road?

Any engineer thoughts on what a stupid idea like this would cost?

 

[meierlde]

Actually the population of North America is well sited for solar. You just have to build DC lines from the higher parts of the great plains east. The Sun sets a couple of hours later in the Great Plains than the East. Note that DC transmission lines don't take the width of real estate that AC lines do. DC lines are now used to bring power from Churchill Falls in Labrador south for example or between the NorthWest and Southwest in the US. Of course the NIMBY lobby would object because that is what they do to power lines.
As to the last comment there are proposals to erect solar in the Sahara (where the sun shines a lot) north to Europe for example.

 

[gerntz]

And others consider the real deniers to be those who choose to ignore the real and verifiable data. NOAA says this:

"The calculated trends for all stations are available as a table in millimeters/year and in feet/century (0.3 meters = 1 foot)."

https://tidesandcurrents.noaa.gov/sltrends/sltrends_station.shtml?stnid=9414290

And this:

"The mean sea level trend is 2.84 millimeters/year with a 95% confidence
interval of +/- 0.09 mm/yr based on monthly mean sea level data from
1856 to 2015 which is equivalent to a change of 0.93 feet in 100 years."

https://tidesandcurrents.noaa.gov/sltrends/sltrends_station.shtml?stnid=8518750

Sorry, you can't quote data that conflicts with what 99.9% of scientists agree upon & not expect backlash. Just saying....

 

[explanade]

Sahara probably not a safe place to set up solar arrays to send to Europe.

Defending the installation and personnel running it probably will be costly.

 

[Whisper66]

Sorry, you can't quote data that conflicts with what 99.9% of scientists agree upon & not expect backlash. Just saying....

Might wanna check your numbers a bit and might even dig into what they really mean. Probably not a good discussion for this board unless we want Porky to visit and kill a good discussion.

 

[Gone4Good]

You can argue that infrastructure investment does not contribute any net real new value, but you need to lay out some basic assumptions. Why does this displace other investment resources (labor, capital, resources) when all 3 are in surplus and why does it cause prices to rise when all 3 are suffering from deflationary pressures.

My assumption is that building dykes to protect existing cities doesn't increase productivity, productive capacity or improve standards of living above previous levels. Replacing an existing power plant with a different, oftentimes more expensive, power plant has much the same effect.

I also assume that whatever excess capacity may exist at the moment won't last for the 100 or so years that we'll be making these kinds of "investments." But I do agree that we currently have a free lunch opportunity to employ idled resources and capital for these kinds of projects. That free lunch won't last. And we've largely squandered it already.

Mostly spending on combating global warming and it's effects are going to be a net economic loss compared to a scenario where that spending wasn't necessary (like the past.) It doesn't build anything new. Instead a lot of existing wealth will get spent protecting existing wealth. We won't get richer doing that. The best we can hope is that we don't get much poorer.

 

[travelover]

Might wanna check your numbers a bit and might even dig into what they really mean. Probably not a good discussion for this board unless we want Porky to visit and kill a good discussion.

It has been argued many times before. Do a search here or start a new thread in the political forum.

 

[MichaelB]

Mostly spending on combating global warming and it's effects are going to be a net economic loss for society. It doesn't build anything new. So a lot of existing wealth will get spent protecting existing wealth. We won't get richer doing that. The best we can hope is that we don't get poorer.

The nice thing about economics is that you can make many different arguments, all you need is a clear set of assumptions, which you have. On these you and I will not see eye to eye, so let's drop it and not distract from an otherwise lively and interesting discussion (that hopefully stays on track).

 

[Totoro]

Sahara probably not a safe place to set up solar arrays to send to Europe.

Defending the installation and personnel running it probably will be costly.

It's also a strategic thingy.

Europe (and every country) want to make sure they can be energy independent if necessary. It's why agricultural subsidies are so persistent.

Still, would be so cool to be able to transport sunshine across the planet.

 

[explanade]

When New Orleans was rebuilt after Katrina, some contractors made money from the reconstruction activities.

But that may have been a temporary surge in economic activity.

Of course the other case is, if they didn't bother to rebuild, they lose whatever economic production the city was providing before the disaster?

Or you can say that about cities and countries after WWII. Europe was a mass of rubble. Reconstruction not only restored previous economic capacity, probably increased it with more modern infrastructure?

 

[Gone4Good]

When New Orleans was rebuilt after Katrina, some contractors made money from the reconstruction activities.

I'm sure they did. But that is only one side of the ledger. We need to account for what was lost too.

Most likely what you're looking at is a destruction of wealth with the storm. And then a transfer of wealth from those who's property was destroyed to those who profited by rebuilding it. Somebody paid all those contractors, after all.