The equation keeps changing

Original post:  Dec 3, 2015

In Paris, the COP21 climate conference is currently underway. Heads of state from 150 countries around the globe are meeting to discuss what the world can do to help mitigate the potentially dangerous consequences of climate change.

This is not the first attempt, but it may be the first one to achieve lasting commitments. Worldwide, there seems to be a growing awareness of the issue and a growing consensus that some changes need to take place. What makes these talks very different from previous conferences is the sudden growth of alternative energy as an actual substitute for fossil fuels.

In this chart based on official information from the Department of Energy, you can see the electricity produced by land-based wind is actually less expensive than new coal power plants!

How did solar and wind energy costs drop so quickly? Here are some explanations.

Let’s start with wind. Two main forces have driven the price of wind in the past five years, MacDonald said. First, she said, it’s cheaper to produce wind turbines than ever before. Second, wind turbines are much more efficient than they used to be.

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But the falling cost of turbines is not the only factor driving down the price of wind. Manufacturers have also gotten better at making individual turbines produce more energy. Wind turbines can now be mounted higher, so they reach more powerful breezes; and their rotors can be bigger, so they capture more air. Utilities have also gotten better at deciding where to place turbines, and they’re more reliable, so they don’t break down as often.

Back to that car-market comparison. MacDonald seemed to understand these many improvements to turbines as amounting to an almost fundamentally different machine. Today’s car market, she said, “is not just about producing a 1920s car more cheaply. When you think about a 1920s car versus a car today, the performance has improved dramatically.”

Solar had a slightly different path:

Solar is a different story. “It’s pretty simple—it’s all about the experience curve. The more of something we do, the better we get at it,” said Jenny Chase, the head of solar at Bloomberg New Energy Finance, in an email.

“Loads of solar got installed in Europe from 2004 to 2008 in response to German and Spanish incentives, meaning it was finally worth building big specialized solar module factories (mostly in China),” she said. “The manufacturers pushed down cost by making the wafers thinner, by optimizing the structure of the cells to get more efficiency (i.e. more energy output for the same area), by reducing the use of silver paste and other expensive components, and all the other ways scale can be reduced.”

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As with wind, smaller improvements have also brought down the price of solar. In particular, Chase highlighted the falling cost of inverters, which convert the direct current produced by photovoltaic cells into the alternating current used by the electrical grid. She also told me that contractors have gotten much more efficient at installing solar panels: “Installers have trained their roofers to build residential photovoltaic systems in one hour, not one day, and got better at sending out teams with everything they need so they don't have to waste any time.”

If the world can sustain investment into continuous improvement in solar and wind while also addressing some of the storage issues, suddenly there are ways to address climate change that may not bankrupt us.

It will be fascinating to watch for the outcome of the summit. Perhaps we can look back and see that this was the real start of a new energy revolution.

Here is the link to the full article:  How Solar and Wind Got So Cheap, So Fast - The Atlantic

Alternative energy reaching price parity

Original post:  Dec 10, 2014

In the New York Times, a recent article notes that solar and wind are reaching competitive price points to fossil fuels (at least for the production of electrical energy).

The cost of providing electricity from wind and solar power plants has plummeted over the last five years, so much so that in some markets renewable generation is now cheaper than coal or natural gas.

Utility executives say the trend has accelerated this year, with several companies signing contracts, known as power purchase agreements, for solar or wind at prices below that of natural gas, especially in the Great Plains and Southwest, where wind and sunlight are abundant.

Those prices were made possible by generous subsidies that could soon diminish or expire, but recent analyses show that even without those subsidies, alternative energies can often compete with traditional sources.

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According to a study by the investment banking firm Lazard, the cost of utility-scale solar energy is as low as 5.6 cents a kilowatt-hour, and wind is as low as 1.4 cents. In comparison, natural gas comes at 6.1 cents a kilowatt-hour on the low end and coal at 6.6 cents. Without subsidies, the firm’s analysis shows, solar costs about 7.2 cents a kilowatt-hour at the low end, with wind at 3.7 cents.

The only issue with renewable energy is the inability to store the energy for the times when the wind won't blow or the sun doesn't shine. Work is currently underway to come up with low cost storage mechanisms.

Here is the link to the full article:  http://www.nytimes.com/2014/11/24/business/energy-environment/solar-and-wind-energy-start-to-win-on-price-vs-conventiona…