It is always interesting to have a conversation with those who have not yet understood the benefits of renewable energy to society. One can always expect the argument that wind and solar would never get built without subsidies and that they are not competitive in the real market.
These people also seem to forget that the fossil fuel industry received subsidies of $5.2 trillion in 2017 Subsidies for renewables were introduced to facilitate the development of these clean technologies, and were reduced as these technologies developed, and the recent release of Lazards Levelised Cost of Energy latest analysis, which is released every year around November, has shown the continued drop in costs for Wind and Solar. The image below shows the unsubsidised comparison of power generation technologies.
An article by Bloomberg reporter Peter Orszag really hits it home. A quote that has been touted by the wind and solar industry for the past couple of years: “Costs are falling so fast, it can make more sense to build new renewable capacity than to run old coal plants.’ We live in a capitalist market where economics are important, sop there is now no reason not to increase the build out of renewable energies. We can reduce out fossil fuel emissions from generation without causing economic disruption.
It must be said though that the final points made by Peter are interesting. His first point on the geographic location of renewable energy and its influence on prices is correct. Taking offshore wind as an example, Lazard has the Levelised Cost of Energy at 89 $/MWh. The recent CFD auction in the UK saw prices drop to under 51 $/MWh. In France, the latest auction held for Dunkirk WInd Farm saw prices drop to just over 48 $/MWh. The point here is that Europe and the US is home to a mature market for renewable technologies and as a result is seeing the greatest cost drops for wind power, and it is not just limited to Europe and the US with China, India, Mexico, and South America having some of the lowest cost wind and solar worldwide.
With regards to the variability of renewables and the storage of energy during times of high generation and low energy demand, this is exactly what SuperNode is addressing. Offshore wind is experiencing large advancements in turbine technologies with turbines now being tested with an output of 12MW. These larger turbines will bring with them higher capacity factors which mitigate against the arguments of the variability of wind. Floating wind technologies being brought into demonstration projects have also shown that they can unlock windier sites that bring higher capacity factors with them.
The cost of solar has dropped so significantly in some markets that joint solar and battery storage bids have won at competitive auctions. This does not take into consideration advancements in new battery chemistries along with other more novel technologies used for energy storage sch as Liquid Air Energy Storage.
Minimising the quantity of storage required in a future decarbonised Europe is something which SuperNode are looking at. With the development of a Supergrid which is capable of connecting all the areas of high offshore wind resource and solar resource with demand centre around Europe, power can be transmitted around the continent in order to maximise utilisation and reduce the amount of renewable energy that is curtailed.
This was meant to be a short post highlighting the release of Lazards annual LCOE analysis, but there was just too much good news to hold back from posting an optimistic view on the adoption of renewables for a future decarbonised world. Its time people saw the advantages of wind and solar, and the true environmental cost of fossil fuels, otherwise we wont stand a chance.
