Plastic In The Ocean: FAQ Guide

Plastic In The Ocean: FAQ Guide

This guide outlines some of the most important information and stats related to plastic in the ocean.

 

Summary – Plastic In The Ocean

  • Several estimates indicate that around 8 million tons of plastic go into the ocean per year
  • This amount of plastic could increase annually in the future as we produce and use more total plastic
  • Plastic that enters the ocean is usually from mismanaged plastic – plastic that is littered, o,r disposed of inadequately in open or unsecure landfills, and leaks into, or is lost to the environment
  • Plastic enters the ocean mostly from coastal populations in close vicinity to the ocean (less than 50kms from the coastline)
  • There’s several ways plastic enters the ocean from land, but a key way is via rivers that carry it from inland areas to coastal populations. A majority of these rivers are located in Asia (around 86%). China is one of the world leaders for total plastic waste, total mismanaged plastic waste, and also is home to the River Yangtze – the top plastic polluting river by plastic input into the ocean in the world
  • Type of plastic entering the ocean can be classified as land based plastic (mostly plastic packaging), and marine based plastic (such as fishing gear and equipment)
  • Overall, land based plastic is the dominant plastic type. But, different geographic locations in the ocean has different shares of each plastic type. As an example, in the Great Pacific Garbage Patch, around 50% of plastic or slightly more, is marine based plastic. Marine based plastic can make up a greater share in parts of the ocean where fishing is intensive

 

How Much Plastic Goes Into The Ocean Every Minute?

  • … one garbage truck of plastic [packaging] goes into the ocean every minute
  • … If we carry on as usual, this is expected to increase to two per minute by 2030 and four per minute by 2050. By 2050, this could mean there will be more plastic than fish in the world’s oceans

– weforum.org

 

Medium.com outlines that each garbage truck has ‘the capacity to carry 15 tons when full’, but we must also consider the efficiency of garbage truck collection, in which, say for example, one ton of non compressed plastic might only be collected at a time. 

 

How Much Plastic Goes Into The Ocean Each Year?

Estimates per year can vary, but most estimates put the amount of plastic input into the ocean at somewhere around 8 million tons a year.

 

  • Between 4.8 and 12.7 million tonnes of plastic enter the ocean each year

– nhm.ac.uk

 

  • More than 8 million tons of plastic is dumped into our oceans every year

– plasticoceans.org

 

  • Annual estimates of ocean plastic input is in the order of up to 10 millions tonnes

– ourworldindata.org

 

How Much Plastic Is In The Ocean In Total, Right Now?

Exact estimates of total plastic in the ocean are hard to make.

The reasons for this are that it’s hard to say exactly what happens to all plastic once it goes into the ocean, and, it’s hard to find accurate methods to quantify the amount of plastic in the ocean right now.

But, some estimates are:

 

  • [it is estimated there are 150 million metric tons of plastic in the ocean right now, and] if we don’t do something now, we could be facing 250 million metric tons in the ocean in less than 10 years [because] plastic production and consumption are predicted to double over the next 10 years

– oceanconservancy.org

 

  • … [in 2019] there are 5.25 trillion pieces of plastic floating on the sea surface. It all adds up to 269,000 tons. That is heavier than 11 Statues of Liberty. Many scientists think there is even more than that.
  • … The rest is underwater [as a result of plastic breaking down into smaller pieces of plastic, like microplastics, and sinking into deeper water]

 – nationalgeographic.org

 

Types Of Plastic Found In The Ocean (Land vs Marine Plastic)

Plastic found in the ocean can be categorised mainly as coming from a land origin (land based), or marine origin (marine based).

Most land based plastic comes from plastic packaging, and most marine based plastic is from fishing equipment and fishing gear.

Land based plastic overall makes up the majority of plastic found in the ocean globally, at around 70-80%, and marine at 20-30%.

But, different geographic regions of the ocean can contain different shares of each plastic type.

Areas of the ocean where fishing is more intensive can contain a higher share of marine based plastic.

One example is the Great Pacific Garbage Patch, where a 50% or greater share of plastic is marine based.

 

Land vs Marine Plastic

  • … it’s likely that marine sources contribute between 20-30 percent of ocean plastics, but the dominant source remains land-based input at 70-80 percent
  • Read more on this stat in the ‘Ocean plastic sources: land vs marine’ section at https://ourworldindata.org/plastic-pollution

– ourworldindata.org

 

Land Plastic

  • Nearly half the plastic waste in the oceans is from packaging, but over half isn’t. For example, approximately 640,000 tonnes of plastic enters the oceans each year as ​ghost gear’ from boats and ships; fishing lines and nets lost or dumped overboard.

– uk-cpi.com

 

On plastic packaging:

  • A full 32% of the 78 million tons of plastic packaging produced annually is left to flow into our oceans

– weforum.org

 

Marine Plastic

  • [marine plastic comes from] fishing fleets that leave behind [discarded fishing equipment like] fishing nets, lines/ropes, ropes, and sometimes abandoned vessels

– ourworldindata.org

 

How Does Plastic Get Into The Ocean?

In general, the cycle of plastic getting into the ocean is:

  • Plastic is produced
  • Plastic is used
  • Plastic becomes waste, and is disposed of
  • Some plastic is recycled, but the vast majority ends up in landfill. Some is also littered
  • Some landfills are well managed and most of the plastic stays in the landfill. But, some landfills are open or uncontained, and the plastic is lost or leaks from the land fill (known as inadequately disposed of plastic)
  • Mismanaged plastic (inadequately disposed plastic, and littered plastic) gets into the ocean via several routes, such as wind or tidal transport, but rivers also play a big part, as well as waste water and stormwater runoff
  • Marine based plastic can be dumped or discarded straight off of fishing vessels as well

 

Where Does Plastic In The Ocean Come From? (Sources Of Ocean Plastic Pollution)

As mentioned above, plastic in the ocean comes from land or marine based sources.

But, specifically, it comes mainly from:

Original Plastic Source

  • In terms of plastic waste by industry – the plastic packaging industry (ourworldindata.org)
  • In terms of total plastic waste by country – China produced the largest quantity of plastic, at nearly 60 million tonnes. This was followed by the United States at 38 million, Germany at 14.5 million and Brazil at 12 million tonnes (ourworldindata.org)
  • In terms of per capita plastic waste by country – Kuwait, Guyana, Germany, Netherlands, Ireland, the United States (ourworldindata.org)
  • In terms of inadequately disposed of plastic (one part of mismanaged plastic, which is material which is at high risk of entering the ocean) – high income countries have far lower rates of inadequately disposed plastic than middle and low income countries because of far more effective waste management [such as landfill sites that better contained and not open].  (ourworldindata.org)
  • In terms of littered plastic (the other part of mismanaged plastic) – [there is] a rate of littering of 2 percent of total plastic waste generation across all countries [and this plastic is at risk of ending up in the ocean] (ourworldindata.org)
  • In terms of total mismanaged plastic waste – a high share of the world’s ocean plastics pollution has its origin in Asia. China contributes the highest share of mismanaged plastic waste with around 28 percent of the global total, followed by 10 percent in Indonesia, 6 percent for both the Philippines and Vietnam. See other countries at https://ourworldindata.org/plastic-pollution
  • In terms of mismanaged plastic waste by region – East Asia and the Pacific lead all regions at 60%

 

How & Where Plastic Gets Into The Ocean

  • In general – coastlines, rivers, tides, and marine sources are the entry points for plastic into the ocean
  • Two of the most important factors in plastic waste ending up in the ocean are – proximity of [a] given population centres to the coast, and national waste management strategies (ourworldindata.org)
  • [Coastal populations within 50km from the coast line are where most of the plastic is at risk of entering the ocean] (ourworldindata.org)
  • Aside from wind or tidal transport, waste water, and storm water, rivers play a key role in carrying plastic to coastal areas from inland areas. 
  • The top 20 polluting rivers accounted for more than two-thirds (67 percent) of the global annual river input. Geographically we see that the majority of the top 20 rivers are located in Asia. The River Yangtze, the top polluting river, had an input of approximately 333,000 tonnes in 2015 —just over 4 percent of annual ocean plastic pollution. [the Ganges River in India and Bangladesh comes in second at 115,000 tonnes, and the Xi River in China third at 73,900 tonnes (ourworldindata.org)
  • [Asia by far leads plastic inputs to the ocean by region at 86%]
  • Fishing vessels play a key role in discarding or dumping plastic into the ocean from marine based sources

 

Other Sources Of Ocean Plastic

  • … plastic microfibres … are shed into wastewater when clothes made from materials such as nylon, acrylic or polyester are washed.
  • [some sources indicate] half a million tonnes of plastic microfibres a year are now ending up as pollution in the ocean – 16 times more than the plastic microbeads from cosmetics … [and it is claimed] over a third (35 per cent) of primary microplastics entering oceans are released through the washing of textiles, and microfibres are more likely than other types of microplastic to absorb toxic chemicals, which may be injurious to health.

– wwtonline.co.uk

 

How Much Plastic In The Ocean Is From Straws?

  • It’s estimated that if all straws around the world’s coastlines were lost to the ocean, this would account for approximately 0.03 percent of ocean plastics. A global ban on their use could therefore achieve a maximum of a 0.03 percent reduction

– ourworldindata.org

 

So, some don’t see straws as a significant part of the ocean plastics problem when measured by quantity or %.

But, something we also have to consider is the negative impact straws have compared to other plastic on marine life for example – are they more or less damaging even though they are lesser in quantity or % than other plastic items?

 

How Much Plastic In The Ocean Is From Fishing?

In general, about 20 to 30% of plastic in the ocean is from fishing and marine based sources.

But, in certain regions of the ocean, like for example regions/areas where intensive fishing occurs, this % can be much higher.

One example is the Great Pacific Garbage Patch:

 

What Is The Island Of Plastic In The Ocean? (Great Pacific Garbage Patch, & Other Patches Of Waste)

Islands of plastic in the ocean are plastics that tend to migrate towards the centre of ocean basins.

One ‘island of plastic’ is the Great Pacific Garbage Patch – you can read more about it’s characteristics at https://ourworldindata.org/plastic-pollution

 

What Happens To Plastic In The Ocean

There is a big discrepancy between the amount of plastic estimated to be entering ocean yearly, and the amount of plastic estimated to be floating on ocean surface water. There are multiple hypothesis’ as to where the rest of the plastic ends up beneath the surface of the water – this is sometimes referred to as the ‘missing plastic’ problem.

 

Surface Plastic

Plastic is buoyant, so it tends to firstly collect on the surface of ocean waters (where it is transported by the prevalent wind and surface current routes, and accumulates in oceanic gyres, with high concentrations of plastics at the centre of ocean basins, and much less around the perimeters – ourworldindata.org)

In 2014, there was approximately 269,000 tonnes of plastic in surface waters [in the ocean] across the world (ourworldindata.org)

You can read more about the ocean basins that have the most plastic mass at https://ourworldindata.org/plastic-pollution

 

‘Missing Plastic’, & Below Surface Plastic

  • It’s unknown where the majority of ocean plastics end up
  • … within the marine environment, plastics can more readily break down into smaller particles [for a variety of reasons]
  • A likely ‘sink’ for ocean plastics are deep-sea sediments … The other possible sinks of missing plastics are shallow-sea sediments, in addition to potential ingestion by organisms. The quantification of these aspects are as yet unknown.

– ourworldindata.org

 

  • [surface plastic] slowly breaks down. As it breaks apart, tiny pieces fall into deeper water. These pieces are called microplastics. Many are so small they can’t be seen without a microscope. Water currents carry them all across the planet.
  • [it’s estimated] some four billion plastic microfibers per square kilometer litter the deep sea

– nationalgeographic.org

 

Effects Of Plastic In The Ocean

Two of the main potential effects of plastic in the ocean are on wildlife, and on humans.

We summarise and link to further resources both below.

 

Impact Of Plastic In The Ocean (How Plastic Affects Marine Life & Animals)

The full impact of plastic on wildlife and ecosystems is not yet know.

But, the three main ways it is known right now that plastic impact wildlife is by:

  • Ingestion
  • Entanglement
  • and, Interaction and Abrasion

Along with those three ways, micro plastic specifically can accumulate in the marine environment can impact wildlife via ingestion.

Read more about each of these at https://ourworldindata.org/plastic-pollution

 

  • … plastic impacts nearly 700 species from our ocean
  • Plastic has been found in more than 60% of all seabirds and in 100% of sea turtles species, that mistake plastic for food. And when animals ingest plastic, it can cause life-threatening problems, including reduced fitness, nutrient uptake and feeding efficiency

– oceanconservancy.org

 

Read more about how plastic impacts marine animals in this guide.

 

Impact Of Plastic In The Ocean On Humans & Human Health

It is thought micro plastics in particular may potential for impact on humans and human health, but:

  • There is, currently, very little evidence of the impact of microplastics in humans. Despite having no clear evidence of health impacts, research on potential exposure is ongoing (ourworldindata.org)

The plastic particles themselves, the release of persistent organic pollutant absorbed to the plastics, and leaching of plastic additives are three areas of concern.

Read more at https://ourworldindata.org/plastic-pollution

 

Solutions To Plastic In The Ocean – How To Stop & Reduce It, & How To Clean It Up

There are two main ways to solve the problem of plastics in the ocean:

  • Preventing plastic from entering the ocean in the first place

There’s three key parties and areas of society that play a role here – individuals, government and policy makers, and innovators and industry.

Read more about specific solutions for each party at https://ourworldindata.org/faq-on-plastics

  • Cleaning up and removing plastic already in the ocean

Micro plastics and plastic beneath the ocean surface are difficult to remove.

But, there are several projects and initiatives trying to clean up and remove surface plastic – investors and researchers from The Ocean Cleanup are a main example.

Read more about cleaning up plastic and what is done with it once removed from the ocean at https://www.weforum.org/agenda/2016/10/every-minute-one-garbage-truck-of-plastic-is-dumped-into-our-oceans/

 

Ocean vs Beach Plastic Waste

There is a difference between plastic waste found on the beach, and waste that ends up in the ocean water.

Here are two guides that summarise waste and plastic waste found on beaches:

 

Sources

1. https://www.nationalgeographic.org/news/ocean-trash-525-trillion-pieces-and-counting-big-questions-remain/3rd-grade/

2. https://www.nhm.ac.uk/discover/quick-questions/how-much-plastic-is-in-the-ocean.html

3. https://plasticoceans.org/the-facts/

4. Hannah Ritchie and Max Roser (2019) – “Plastic Pollution”. Published online at OurWorldInData.org. Retrieved from: ‘https://ourworldindata.org/plastic-pollution’ [Online Resource]

5. https://ourworldindata.org/faq-on-plastics

6. https://oceanconservancy.org/trash-free-seas/plastics-in-the-ocean/

7. https://www.uk-cpi.com/blog/a-green-future-what-can-we-do-about-plastic-packaging

8. https://medium.com/@bnaturl/what-does-8-million-tons-of-plastic-mean-3a1ef8c20be1

9. https://www.weforum.org/agenda/2016/10/every-minute-one-garbage-truck-of-plastic-is-dumped-into-our-oceans/

10. https://www.bettermeetsreality.com/most-common-types-of-waste-found-in-oceans-on-beaches/

11. https://www.bettermeetsreality.com/how-to-reduce-your-ocean-beach-rubbish-footprint-based-on-marine-waste-stats/

12. https://www.bettermeetsreality.com/how-plastic-affects-faq-guide/

13. https://wwtonline.co.uk/features/microplastics-plastics-plastics-everywhere

‘Is Nuclear Energy’ … (FAQ Guide)

'Is Nuclear Energy' ... (FAQ Guide)

This is a short guide looking at the answers to some of the most commonly asked ‘Is Nuclear Energy …’ questions.

 

Is Nuclear Energy A Fossil Fuel 

Nuclear energy, coming from uranium, is not considered a fossil fuel.

Fossil fuels are considered to be coal, natural gas, and oil.

There are a number of differences between fossil fuels and nuclear energy, including but not limited to how they develop naturally, and the process used to generate electricity from these sources.

 

Is Nuclear Energy Renewable

Nuclear energy is not considered to be a renewable energy source.

However, uranium and nuclear energy has an asterisk against it compared to fossil fuels for the future.

It’s thought new generations of nuclear reactors could extend use for current uranium supplies, and if we can find a way to extract it economically, uranium can be found in trace amounts in seawater.

 

Is Nuclear Energy Sustainable

There’s a number of ways you could define sustainable.

But, a general definition of sustainable might be:

  • the ability to to be maintained constantly, especially over the long term
  • … without depleting natural resources, degrading the environment, ecosystems or biodiversity

Uranium, in present times, is a finite resource, which rules out nuclear energy from being sustainable (but, note the exception we outlined above).

The whole process of nuclear energy also involves uranium mining, and the disposal of high risk, and long lasting radioactive waste – it’s questionable whether these things are sustainable practices.

Compared to fossil fuels though, it could be argued nuclear energy is more sustainable in a number of ways, especially during operation.

Something people sometimes forget, is that nuclear energy used a lot of water – similar to fossil fuels. Water is a precious resource we need to conserve and use wisely for the future.

 

Is Nuclear Energy Good Or Bad For The Environment

Nuclear energy involves:

  • Uranium mining (various types of land degradation, pollution, and waste can be a result)
  • Uranium ore refinement and processing (energy used, and waste produced)
  • Production of energy in nuclear reactors (lots of water used)
  • Treating and disposing of nuclear waste – low risk and short lasting waste, and mid to high risk, and medium to long lasting waste (waste is radioactive and needs to be isolated so it isn’t exposed to the external environment)

Overall, nuclear energy is probably better for the environment than fossil fuels (because it doesn’t pollute the air as much or release as much GHGs), but probably not as much as some renewable energy sources.

You can read more about the impact of nuclear power on the environment at https://en.wikipedia.org/wiki/Environmental_impact_of_nuclear_power#Comparison_to_coal-fired_generation 

 

  • [With renewables] the dilute nature of water, sunlight, and wind means that at least 450 times more land and 10 – 15 times more concrete, cement, steel, and glass, are required than for nuclear plants
  • … solar panels create 200 – 300 times more hazardous waste than nuclear, with none of it required to be recycled or safely contained outside of the European Union

– forbes.com

 

  • [there is] upstream land destruction for coal-fired power plants (mountain top removal for coal mining comes to mind) and nuclear reactors

– cleantechies.com

 

Is Nuclear Energy Efficient

There’s a number of ways to define efficient. 

In a very basic sense – renewable energy is seen as more efficient because the energy source is used without any refinement or without many consequences of losing any of it’s original energy input.

But, if we zoom out and look at nuclear being used in an electricity grid with competing energy sources, nuclear and other baseload energy can have worse economics for various reasons.

 

  • We can find out which one of these renewable energy sources is the most efficient by calculating the costs of the fuel, the production, and the environmental damages. Wind comes out on top by a wide margin over all the other sources. It is followed in order by geothermal, hydro, nuclear and solar.

– borntoengineer.com

 

Is Nuclear Energy Cheap Or Expensive? (Is It Cost Effective?)

Two notes on this:

But, nuclear can be cheaper overall when looked at in terms of providing electricity as a service to the grid compared to variable energy sources like solar and wind which might need backup dispatchable energy sources to support them, and other support equipment and infrastructure.

So, the energy grid nuclear is operating in can make a difference to how cheaply it produces electricity.

Note – capital and upfront costs are different to whether an energy source provides cheap electricity. The former being more a supply side thing, whilst the latter takes into consideration the whole electricity system and external factors that impact on electricity pricing.

Certainly there are some countries in the world known for producing cheap electricity with a significant share of nuclear energy in their electricity mix.

 

  • ramping nuclear plants to accommodate intermittent electricity from solar and wind simply adds to the cost of making electricity without delivering fewer emissions or much in the way of cost-savings. That’s because only very small amounts of nuclear fuel and no labor is saved when nuclear plants are ramped down

– forbes.com

 

Is Nuclear Energy Clean

Nuclear energy is fairly clean when in operation compared to fossil fuels when considering it either doesn’t, or does only in small amounts:

  • emit greenhouse gases like carbon dioxide,
  • or release air pollution through air contaminants.

 

Consider this from forbes.com:

  • nuclear power as the only truly scalable, reliable, low-carbon energy source proven capable of eliminating carbon emissions from the power sector

 

Is Nuclear Energy Safe

According to various measures, nuclear energy might be one of the safest and least dangerous energy sources, especially when compared to fossil fuels.

One area that might need to be examined though is the impact of high risk and long lasting nuclear waste on society and the environment when disposed of.

 

Is Nuclear Energy Reliable?

Compared to variable energy sources like wind and solar, nuclear is more reliable in terms of providing a consistent power supply. 

Even coal and nuclear though experience interruption sometimes due to different factors.

Reliability though, is something that can be determined by the energy grid as a whole, and not just one energy source.

 

  • Nuclear produces reliable base-load power, and although newer-generation reactors can also ramp up and down fairly quickly, the ideal setup would have gas turbines for peaking power. Solar and wind are only available when the weather plays along. Solar can’t produce consistent baseload at all, while it peaks at the wrong time. The wind is better for baseload, since there’s always wind blowing somewhere, but it only produces whatever the weather deigns to deliver.

– dailymaverick.co.za

 

  • … hydroelectricity is far less reliable and scalable than nuclear

– forbes.com

 

Is Nuclear Energy Good Or Bad Overall?

It depends on the country and government you ask.

Some countries have significant nuclear energy supplies for electricity. Some countries see nuclear critical to a clean energy and secure energy future.

Other countries, Germany being an example, are trying to phase out nuclear energy for different reasons.

Read more about some of the pros and cons of nuclear energy in this guide.

 

Sources

1. https://www.bettermeetsreality.com/non-renewable-energy-definition-with-examples/

2. https://www.bettermeetsreality.com/how-much-uranium-is-left-in-the-world-on-land-in-oceans-when-will-we-run-out/

3. https://www.bettermeetsreality.com/which-energy-source-is-the-most-dangerous-harmful-which-is-safest/

4. https://en.wikipedia.org/wiki/Environmental_impact_of_nuclear_power#Comparison_to_coal-fired_generation

5. https://www.bettermeetsreality.com/is-renewable-energy-sustainable/

6. https://www.forbes.com/sites/jeffmcmahon/2018/10/01/3-reasons-nuclear-reactors-are-more-expensive-in-the-west-hint-its-not-regulation/#1237136f5d1a

7. https://www.bettermeetsreality.com/the-cost-of-renewable-energy-solar-wind-hydro-etc-vs-fossil-fuels-nuclear/

8. https://www.bettermeetsreality.com/is-renewable-energy-efficient-solar-wind-hydro-geothermal-more/

9. https://www.forbes.com/sites/michaelshellenberger/2018/05/08/we-dont-need-solar-and-wind-to-save-the-climate-and-its-a-good-thing-too/#6c6732fae4de

10. https://www.bettermeetsreality.com/is-renewable-energy-reliable-wind-solar-hydro-geothermal-biomass-more/

11. https://cleantechies.com/2015/07/06/study-proves-fossil-fuels-way-worse-for-land-use-than-renewables/

12. https://www.borntoengineer.com/efficient-form-renewable-energy

13. https://www.dailymaverick.co.za/opinionista/2019-08-13-mantashe-is-right-south-africa-must-build-more-nuclear-energy/

Case Study: Germany’s Renewable Energy Transition (Energiewende) … Success, or Failure? (An Overview)

Case Study: Germany's Renewable Energy Transition (Energiewende) ... Success, or Failure? (An Overview)

This guide outlines some key information about Germany’s renewable energy transition, also known as ‘Energiewende’.

We look at the impact it has had on various areas of German society, and the issues encountered.

We also look at potential solutions going forward.

 

Summary – An Overview Of Germany’s Renewable Energy Transition

  • Germany’s energy transition involves moving from an energy mix previously dominated by coal, natural gas and nuclear, to a higher share of solar and wind, and to a lesser extent, bio energy. Nuclear energy has already commenced being phased out, and coal will be next.
  • Some key areas to consider with the transition up to this point might be:
  • Electricity Prices – have largely increased during the transition, with variable renewable energy, carbon prices, and renewable/green energy tax and State imposed costs in electricity bills a likely main cause for this
  • Emissions – emissions have decreased in total from 1990 until 2019, but, Germany are not expected to meet their 2020 emissions target. And, some wonder if transitioning to natural gas first (which is cleaner burning), or keeping nuclear for longer), and transitioning to renewables slower would have been better for emissions. Some don’t think that emissions have decreased enough considering the amount of renewable production there has been.
  • Costs – It can be very hard to estimate all costs (across all areas – direct and indirect), or compare costs of a renewable energy transition compared to a conventional energy system. But, some estimates indicate hundreds of billions have already been spent on the renewable transition, and it could end up costing Germany a trillion dollars in a few decades time.
  • Reliability & Security Of Electricity Supply – Germany has one of the most reliable and secure electricity supplies in Europe, according to some sources.
  • Phasing Out Other Energy Sources – Nuclear is the energy source that has been most heavily phased out so far. Some argue this is a relatively clean low cost energy source that should not have been targeted or reduced before fossil fuel sources (but, these fossil fuel sources are needed for a range of reasons, including as backup/dispatchable energy sources for the intermittency of solar and wind – which is a bit of an irony)
  • Other Issues – there are a host of grid related demand/supply and over/under capacity issues that Germany has experienced. They have also experienced issues with load shedding to other countries. They have also experienced problems in co-ordinating the transmission of power (via transmission lines) from wind farms in the North, to recipients in the South. There are many issues still to be addressed and worked through that have been introduced as a result of variable renewable energy like solar and wind.
  • Solutions Moving Forward – two big solutions going forward might be to regain the trust and support of the German public, and, to better integrate and involve the transport, building efficiency, and industrial sectors in the clean energy transition. There may also need to be more co-operation and less ‘red tape’ and failures to get new investment and projects approved and progressing. 

Overall …

  • Germany has certainly had some issues with their renewable energy transition
  • Major changes to a country like this should carefully consider the economic, social, environmental, technological and other consequences, and pros and cons, beforehand
  • Other countries should look at the scale and speed at which Germany made changes, and see what they can learn for their own energy sector changes
  • We should be asking – why did the problems that arose actually arise, and how can they be prevented in the future with similar transitions by other countries
  • We should also be asking what solutions for high shares of solar and wind for electricity generation other countries and States are implementing, that Germany isn’t and can implement for better results
  • We should also be aware that there might be cost of not transitioning to renewables like Germany has done, such as climate change, air pollution (and other types of pollution), the increased costs of new fossil fuel technology, and other costs – all of which may make renewables in certain shares of electricity generation more favorable in some circumstances. This cost of not transitioning can be hard to estimate.
  • It would be interesting to read studies that outline the benefits that Germany’s renewable energy transition has produced vs the costs and cons – with some hard data and stats. As just one example, have other countries or States worldwide benefited from the investment Germany has made? South Australia might be one example of this (although they have since had to buy an expensive large energy storage battery)
  • We should keep in mind that there are methods to smooth out the negative consequences of variable energy sources like solar and wind, and it’s not clear how extensively Germany is applying these methods right now
  • Technology is also constantly advancing with renewables, so cheaper newer technology, like large energy storage batteries, could soon make things easier where backup dispatchable energy generation from other energy sources is currently being used
  • The good news is that is does still look like there are solutions to help improve Germany’s current energy situation 
  • In the future, it would help if there were very clear reasons laid out for energy transitions like this, along with clear measurables for how the public can track the transition across every area (economic, social, environmental, and so on). Without something clear like this, we may only assess a transition on one factor like say emissions, in which case, Germany not meeting it’s 2020 target would make the transition a failure, when in reality, there are many other measurables by which an energy transition can be tracked and assessed
  • At the moment, we can compare one country to another (such as comparing Germany to Denmark, Belgium, the US, Australia etc.), but, every country (and State within a country) is dealing with different factors and variables with their energy sector, and so every transition is different, even if there are common lessons that can be learned from each. A good illustration of this is for example, there are countries with higher renewable energy shares of electricity generation than Germany, that have lower electricity prices. Just as a couple of examples are – Iceland has a different energy mix than Germany, using more hydropower and geothermal energy. And, Denmark is a world leader in wind energy, with a huge Danish wind company expanding rapidly.

Our guide has only captured a small part of Germany’s energy transition story. In reality, incredibly deep and wide detailed studies are required to properly assess an energy transition of this magnitude. 

 

What Is Germany’s Renewable Energy Transition (‘Energiewende’)?

It is:

  • … [a] planned transition by Germany to a low carbon, environmentally sound, reliable, and affordable energy supply.
  • The new system will rely heavily on renewable energy (particularly wind, photovoltaics, and hydroelectricity), energy efficiency, and energy demand management. Most if not all existing coal-fired generation will need to be retired. The phase-out of Germany’s fleet of nuclear reactors, to be complete by 2022, is a key part of the program.

– wikipedia.org

 

What we can see from the energy transition graph (in the Wikipedia resources), is that, wind power and solar PV are two energy sources that are set to grow significantly to produce electricity during the transition (along with biomass). Nuclear and coal are planned to be reduced as electricity generation energy sources.

 

Germany Energy Source Mix Right Now

 

Electricity Prices

Germany has some of the highest electricity prices in the world.

What we do know about electricity prices, is that renewable energy is one of only many factors that has the ability to impact electricity prices, and is not the sole factor.

What we know with Germany though, at least for retail electricity bills, is that it’s likely renewable energy (via State charges and taxes to support renewable and green energy, carbon prices, and other factors) is responsible in a significant way for the high electricity prices. Some sources report that German electricity prices rose by 51% during its energy transition [to renewables] between 2006 and 2018.

Higher electricity prices impact factories, employment and poor families (wattsupwiththat.com)

Some question the impact of gradually phasing out nuclear from the market (as a low cost and competitive generator of electricity) on electricity prices too. Some point to France, who generates a significant amount of electricity from nuclear energy, but have much lower electricity prices, as a comparison.

Something that has to be asked, is, at what point do taxes and State charges for renewables and green energy reduce? At what point is renewable energy established enough, or providing high enough of a share of electricity generation that taxes can be reduced?

It also should be asked what impact carbon prices are having on emissions vs the economy and affordable and accessible electricity.

 

Greenhouse Gas & Carbon Emissions

Greenhouse gas and carbon emissions have decreased overall from 1990 until now.

It’s hard to tell what emissions would have been if a greater mix of nuclear and fossil fuels, or even more natural gas, was used over wind and solar.

Some sources indicate that emissions are more closely tied to economic activity than energy sources used – so, some question the impact increased solar and wind energy has had on emissions.

Germany aren’t looking likely to meet their 2020 carbon emissions target. But, the question must be asked whether that target and future targets were too ambitious to begin with.

Overall, emissions have decreased, but it’s unclear if the transition to renewables has helped or hindered these emissions either way.

 

  • nuclear powered France enjoys power prices a fraction of those suffered by its eastern neighbour; and its CO2 emissions are tiny fraction of those being pumped out by notionally wind and solar powered Germany.
  • Even coal-powered Poland has managed to cut it CO2 emissions faster than … Germany

– stopthesethings.com

 

  • [Germany has seen a 27% [GHG] decrease between 1990 and 2014. However the country will need to maintain an average GHG emissions abatement rate of 3.5% per year to reach its Energiewende goal, equal to the maximum historical value thus far.

– wikipedia.org

 

  • … coal consumption and CO2 emissions have been stable or risen slightly the last seven to ten years [up to 2018]

– wattsupwiththat.com

 

  • [because of the variability of solar and wind which can be high output one day and low output the next] Most of the electricity that Germany needs is still produced by burning coal [which emits GHGs]
  • [As of 2019, Germany] is far from meeting the targets it set for itself [in terms of future emission targets]
  • [Some point to the US transitioning from coal to natural gas, and look at their emission trend over the last 20 to 30 years, and wonder if Germany went into solar and wind energy too fast, too soon]
  • Even earlier, in 1997, back when she was the German environment minister, Merkel told DER SPIEGEL: “When it comes to reducing CO2 emissions, vehicle traffic is the biggest hurdle.” She could say the same thing today.
  • [Germany has done something about electricity production, but not as much about traffic, industrial and building emissions]
  • [If Germany wants to meet future emissions targets] It is time for Energiewende 2.0, a much more all-encompassing version that integrates all sectors, technologies and markets. In the end, the system must be extremely interconnected and more than just a gigantic machine that produces and distributes electricity generated by wind, sun and water. [With excess energy from variable energy sources, it could be used] to produce methane and hydrogen that could then be fed into the natural gas network, which has 500,000 kilometers of pipelines. Another option would be to turn the wind power into methane or hydrogen and then turn them into so-called e-fuels. Here, too, existing infrastructure could be used: fuel-storage facilities, pipelines and gas stations of the petroleum industry

– spiegel.de

 

There is a graph at https://www.cleanenergywire.org/factsheets/germanys-greenhouse-gas-emissions-and-climate-targets

What this graph shows is that Germany’s overall emissions and energy sector emissions are decreasing from 1990 to 2018, but, some question whether this decrease is enough given the cost and problems associated with the renewable energy transition.

 

Cost Of Renewable Energy Transition, Compared To Using Conventional Energy Sources

Some sources indicate that the transition has been very costly so far – up to the hundreds of billions of dollars, and could stretch to the trillion dollar mark in coming decades.

But, other sources indicate that, in reality, it is very hard to put a monetary figure on pursuing clean energy vs. just conventional energy.

There are many cost related factors that need to be taken into account, and not all of them can be accurately calculated.

What many cost estimates don’t take into account is the cost to address air pollution, climate change, health issues caused by air pollution, jobs created by solar and wind and the flow on effect into the economy, and other indirect factors.

 

  • Some sources indicate that the renewable energy transition could end up costing Germany a trillion dollars so far

– stopthesethings.com

 

  • As of 2013, Germany spends €1.5 billion per year on energy research in an effort to solve the technical and social issues raised by the transition

– wikipedia.org

 

  • [the Energiewende] has cost at least 160 billion euros in the last five years [up to 2019], and the expenditures “are in extreme disproportion to the results”

– spiegel.de

 

  • The cost of Germany’s “Energiewende” (energy transition) is enormous: some 200 billion euros by 2015

– wattsupwiththat.com

 

  • Hundreds of billions of euros have been squandered on subsidies to wind and solar

– stopthesethings.com

 

  • In Germany, around €190 billion has already been burnt on renewable subsidies; currently the green energy levy costs €56 million every day. And, the level of subsidy for wind and solar sees Germans paying €20 billion a year for power that gets sold on the power exchange for around €2 billion.
  • subsidies that will top €1 trillion

– stopthesethings.com

 

Cleanenergywire.org:

  • the costs of the Energiewende and of the transformation of our energy supply could add up to around one trillion euros by the end of the 2030s without policies in place to lower the costs. [the] legal commitments to support renewable energy alone would add up to about 680 billion euros by 2022, and that the costs of grid extension, back-up power generation capacities, research & development, electric mobility, and the modernisation of buildings would have to be added to this figure

A good breakdown of the costs of the transition can be found at https://www.cleanenergywire.org/factsheets/how-much-does-germanys-energy-transition-cost

 

Power Reliability, Security, & Power Blackouts

Some sources indicate that blackouts are a side effect of the variable energy sources like wind and solar, and a grid that isn’t designed to cope with surplus and inadequate power.

But, other sources say that, along with Switzerland and Denmark, Germany’s electricity reliability is among the best in Europe as far as minutes of interruptions to supply per year go.

 

  • Germany still has one of the most reliable electricity grids in the world … Germany’s security of supply is among the best in Europe
  • … actual power blackouts are increasingly caused by extreme weather events, rather than by the transition to renewable energies
  • Generally, security of supply strongly correlates with the share of underground electricity cables.
  • In Germany, 80 percent of its 1.8 million kilometres of cables are buried, whereas in the US – with around 40 percent – and Australia and many Southern European countries, this share tends to be lower. This makes the grid more vulnerable to being disrupted, for example by fallen tree branches.
  • The sources of energy generation so far have little impact on security of supply. But grid operators in Germany have to go to great lengths to balance asymmetric production of green electricity across their networks.
  • The amount of so-called “re-dispatch measures” has risen strongly. Redispatch is when the grid operator forces a power station to lower production in a region with oversupply, and directs another plant in a low-production region to higher output. The cost is passed on to consumers.

– reneweconomy.com.au

 

Phasing Out Of Other Energy Sources

There has been a phasing out of certain energy sources like nuclear energy.

This has had many potential implications such as eliminating competition for affordable (and clean in several ways) energy sources, decreasing nuclear sector jobs, and consequently decreasing total income and opportunities in certain communities where power plants are being shut down.

 

Other Power Grid & Energy System Issues

There are a range of grid operations, technological, engineering and other types of issues being created from the change of energy sources.

 

  • [Germany’s power grid has been strained in the past due to too little energy being fed into the system … it’s not clear whether variable renewable energy is a cause of this]

– cleanenergywire.org

 

  • [Due to strong flows from variable solar and wind energy, there can been problems with over capacity of German grids, and excess power can be offloaded/transmitted to Poland and Czech Republic]
  • … the Czech Republic and Poland are currently installing four phase shifters at their borders with Germany that can block unwanted currents
  • [Variable flows from solar and wind can also cause too little power (under capacity) to be going into German power grids]
  • [Grid stability issues also causes electricity bidding and trading problems with countries like Austria, where existing bidding zones may have to be split]

– cleanenergywire.org

 

  • [Variable renewable energy like wind power creates problems with re-dispatch issues and costs
  • In a nutshell, this is fluctuating renewable energy sources … creating different challenges for the country’s grid operators, such as congesting transmission lines, consumers and businesses not getting their electricity, conventional power plants having to turn their supply off, and other power plants having to abruptly ramp up supply]

– cleanenergywire.org

 

  • [solar and wind can introduce problems related to producing too little power, too much power, power system frequency imposing limits on solar and wind production, having to disconnect wind and solar sources at certain times, forced power exports (load shedding) at negative electricity prices, allowing to AC frequency to drift too high or too low and risking blackouts like what happened in South Australia, and other issues]
  • [a lot of these costs can be passed onto electricity consumers]
  • Germany has a target of getting 60% of their total energy consumption from renewables by 2050, [and] they must multiply the current power production from solar and wind by a factor of 15 [to get there]. They must also expand their output from conventional power plants by an equal amount, to balance and backup the intermittent renewable energy. Germany might import some of this balancing power, but even then the scale of this endeavor is enormous.

– wattsupwiththat.com

 

  • [As of 2019 Germany has] a lack of grids and electricity storage

– spiegel.de

 

Other Issues

Other issues might include:

  • the amount of non sustainable material that certain renewable energy technology requires for construction and operation
  • the fact that fossil fuel and dirty energy sources still need to be kept in operation for now (without effective energy storage options in place like batteries for example), and they may be running inefficiently and still contributing to pollutions and emissions
  • there is a lack of agreement and co-ordination between political parties, the public is starting to lose faith in the transition, and there is a lot of system inefficiencies that are keeping progress from being made with the transition
  • impacting on other energy sources like coal, and natural gas, that have to turn on and off or idle when there is an over or under supply of power to the grid. This can impact investment in energy technology (due to uncertainty), and impact profit and revenue of certain energy sources
  • the government or producers having to pay consumers to take electricity when there is a surplus, or prices rising sharply when there is a lack of electricity – both caused primarily by the variability/intermittency of solar and wind
  • large energy storage batteries currently being very expensive

 

  • [to meet Germany’s 2050 energy target] the amount of land, concrete, steel, copper, rare earth metals, lithium, cadmium, hydrocarbon-based composites and other raw materials required to do this is astronomical. None of those materials is renewable, and none can be extracted, processed and manufactured into wind, solar or fossil power plants without fossil fuels. This is simply not sustainable or ecological.
  • [For other countries that rely primarily on fossil fuels and nuclear power currently, if they want to match Germany’s production from renewables] … such countries will be able to replace only about one quarter of their fossil and nuclear power, because these power plants must remain in operation to ensure frequency regulation, balance and back-up power [and this has a range of implications]

– wattsupwiththat.com

It’s worth read this resource for a full range of the issues experienced by the German power system in lieu of increased variable solar and wind reliance – https://wattsupwiththat.com/2018/12/21/germanys-green-transition-has-hit-a-brick-wall/ 

Note though – what this resource may or may not take into account, is increased implementation of measures (or advances in technology or solutions) to deal with the variability and intermittency of solar and wind in the future.

 

  • … [aside from the technical side of things, there is a lack of co-ordination between political parties, between wind park builders and those responsible for grid connections, and between planning authorities, municipalities or even individual citizens]
  • [these things are making it hard to progress with an improved renewable energy systems]

– spiegel.de

 

How Might Germany Approach The Future When It Comes To Their Energy Systems?

Spiegel.de offers this brief summary:

  • [Firstly] Policymakers must ensure that people are on board. Voters must begin to understand what the transformation means for them and that it is vital that they change their behavior. Without sacrifice, it won’t work. The second, more difficult, part of the Energiewende — the intelligent interlinking of different sectors — is bringing the Energiewende closer to ordinary people. It is influencing how and where people live, how they travel.
  • Technologically speaking, it’s possible to make the energy system free of fossil fuels by 2050, especially in a high-tech country like Germany. Everything is ready: the studies, the strategies, the facilities. ESYS, the association of scientists, has formulated recommendations for how politicians, businesses and society can reach their goals.
  • According to ESYS, Germany needs to increase its solar- and wind-facility capacity by a factor of five to seven, make synthetic fuel a pillar of the energy system and introduce a CO2 tax in all sectors. According to ESYS predictions, the transformation would cost 2 percent of the country’s annual GDP. Currently, that would be about 70 billion euros.
  • By 2050, the costs would add up to 2 to 3.4 trillion euros, depending on the scenario. Other forecasts fluctuate between 500 million and about 2 trillion euros. One way or the other, the second part of the Energiewende will be expensive and exhausting, a project as demanding as German reunification.

Read their full resource to see the full list of challenges and potential future solutions: https://www.spiegel.de/international/germany/german-failure-on-the-road-to-a-renewable-future-a-1266586-2.html

 

Sources

1. https://www.bettermeetsreality.com/does-renewable-energy-make-electricity-cheaper-or-more-expensive/

2. https://www.bettermeetsreality.com/causes-of-high-or-increased-electricity-prices-in-different-countries-states-around-the-world-case-studies-examples/

3. https://www.bettermeetsreality.com/electricity-prices-in-countries-that-use-the-most-least-renewable-energy-for-electricity/

4. https://stopthesethings.com/2019/01/06/germanys-renewable-energy-fail-german-co2-emissions-10-times-higher-than-nuclear-powered-france/

5. https://en.wikipedia.org/wiki/Energiewende_in_Germany#Status

6. https://stopthesethings.com/2018/08/13/germanys-renewable-energy-disaster-part-1-wind-solar-deemed-technological-failures/

7. https://stopthesethings.com/2017/02/02/germanys-monumental-environmental-fail-co2-emissions-rise-despite-etrillions-blown-on-subsidised-wind-solar/

8. https://www.cleanenergywire.org/news/german-power-grid-strained-several-moments-june-cause-unclear

9. https://reneweconomy.com.au/germanys-electricity-grid-stable-amid-energy-transition-13244/

10. https://www.cleanenergywire.org/news/grid-authority-considers-split-austrian-german-electricity-market

11. https://www.cleanenergywire.org/factsheets/re-dispatch-costs-german-power-grid

12. https://www.bettermeetsreality.com/energy-sources-energy-mix-by-country-where-major-countries-in-the-world-get-their-energy-from/

13. https://wattsupwiththat.com/2018/12/21/germanys-green-transition-has-hit-a-brick-wall/

14. https://www.spiegel.de/international/germany/german-failure-on-the-road-to-a-renewable-future-a-1266586.html

15. https://www.cleanenergywire.org/factsheets/germanys-greenhouse-gas-emissions-and-climate-targets

16. https://www.cleanenergywire.org/factsheets/how-much-does-germanys-energy-transition-cost

‘Does Renewable Energy …’ (FAQ Guide)

'Does Renewable Energy ...' (FAQ Guide)

This is a short guide answering some of the most commonly asked ‘Does Renewable Energy … X’ questions.

 

Does Renewable Energy Cost More, Or Less?

Cost of renewable energy is different to the price of electricity supplied by renewable energy sources. 

We’ve published guides on both:

 

Does Renewable Energy Work?

This is a broad question.

We might answer it by looking at what renewable energy is used for mainly right now, and seeing how reliably it performs at that use.

Renewable energy, right now, is used far more widely for electricity generation and consumption, than it is for transportation or heating/cooling (where fossil fuels are still dominant in both of these sectors).

In terms of the electricity sector, renewable energy is used on a commercial/utility level, but also residentially on individual household setups.

On the utility/power grid level, we’ve put this guide together on how reliable renewable energy is in providing electricity compared to fossil fuels and nuclear energy.

Further to that, you may be wondering if renewable energy is something that can continue to expand to eventually provide 100% of our energy or electricity. You can read this guide that explores if renewable energy can eventually replace fossil fuels, meet demand and power to world.

 

Does Renewable Energy Create Jobs?

There’s two relevant guides we’ve published on this question:

 

Does Renewable Energy Cause, Or Reduce Pollution?

Renewable energy does cause some environmental pollution and environmental issues.

Specific renewable energy sources may also use more construction materials too.

But, overall, renewables seem to cause a lot less pollution than fossil fuels, especially air and water pollution.

Read more about the environmental and other benefits of renewable energy in this guide.

 

Does Renewable Energy Produce Greenhouse Gases & Carbon Dioxide?

There’s two relevant guides on this question:

 

Does Renewable Energy Save Money?

There’s two areas that this question applies to:

  • Whether renewable energy saves households money that install a renewable energy system on their property, such as a solar panel and storage battery setup

This answer would depend on multiple factors such as the installation cost, the maintenance cost, feed in credits, tax implications, electricity prices in the city/State, and so on. It would be a case by case basis

  • Whether renewable energy saves money on the State or National level in terms having a cost effective and affordable energy and electricity system

We’ve answered that question in the ‘Cost of Renewable Energy’ guide linked to above.

 

Does Renewable Energy Run Out?

We’ve put together a couple of guides that answer this question:

 

Sources

1. https://www.bettermeetsreality.com/the-cost-of-renewable-energy-solar-wind-hydro-etc-vs-fossil-fuels-nuclear/

2. https://www.bettermeetsreality.com/does-renewable-energy-make-electricity-cheaper-or-more-expensive/

3. https://www.bettermeetsreality.com/is-renewable-energy-reliable-wind-solar-hydro-geothermal-biomass-more/

4. https://www.bettermeetsreality.com/why-different-energy-sources-are-considered-renewable-solar-wind-hydro-geothermal-more/

5. https://www.bettermeetsreality.com/does-renewable-energy-create-more-jobs-than-fossil-fuels-renewable-energy-jobs-vs-fossil-fuel-jobs/

6. https://www.bettermeetsreality.com/how-many-jobs-does-renewable-clean-energy-create-worldwide-by-country-by-energy-source/

7. https://www.bettermeetsreality.com/how-much-carbon-greenhouse-gas-each-energy-electricity-production-source-emits-carbon-footprint/

8. https://www.bettermeetsreality.com/which-energy-source-is-the-most-dangerous-harmful-which-is-safest/

9. https://www.bettermeetsreality.com/importance-renewable-energy-benefits-advantages-social-environmental-economic-health/

10. https://www.bettermeetsreality.com/solar-energy-pros-cons-now-future/

11. https://www.bettermeetsreality.com/challenges-problems-with-transitioning-to-renewable-energy/

12. https://www.bettermeetsreality.com/can-renewable-energy-replace-fossil-fuels-meet-demand-power-the-world-moving-towards-100-renewable-energy/

The Cost Of Renewable Energy (Solar, Wind, Hydro, Etc.) vs Fossil Fuels & Nuclear

The Cost Of Renewable Energy vs Fossil Fuels & Nuclear

The cost of renewable energy is something that can be misunderstood.

In this guide, we look at the true cost of renewable energy, and compare it to fossil fuel and nuclear energy costs.

 

Summary – The Cost Of Renewable Energy

  • There are several different types of renewable energy sources
  • Each type of renewable energy has a different cost (and, costs can vary from country to country, and State to State)
  • The cost of renewable energy should be differentiated from electricity prices – the cost being the cost paid to supply a unit of electricity, and the price being what is paid for that unit of electricity by the end user. Costs are essentially producer side, and prices are consumer side
  • Costs for renewable energy include capital and operational/running costs, which can be expressed individually, or, as lifetime costs that are all inclusive (LCOE – levelized cost of electricity) 
  • What is not mentioned as frequently are the indirect costs of different energy sources, such as infrastructure costs (grid upgrade and redesign, storage batteries, and so on), and other indirect costs such as taxes, subsidies and higher electricity prices
  • Cost can even be stretched out to include the external costs to address problems caused by a particular energy sources (such as air pollution, climate change, and so on)
  • Renewable energy technology and capital like solar and wind are consistently getting cheaper with more investment, demand, and so on
  • New coal plants and fossil fuel power related technology is getting more expensive. We may also have to consider carbon taxes/prices and polluters taxes in the future for dirtier energy sources
  • Renewable energy has many benefits – so, the cost has to be weighed against benefits to understand if renewables are more of an investment for the long term future than a cost.
  • We have to ask what we are definitely getting out of renewables compared to fossil fuels and nuclear
  • We have to ask how each energy source that provides us power is impacting key factors of society such as electricity prices, and social, environmental and economic factors

 

Main Cost Factors For Energy Sources

The main cost factors are usually:

  • Capital costs (construction and all costs to get the project up and operating)
  • Fuel costs and operational/running costs (fuel, maintenance costs, repair costs, wages, handling any wastes etc.)

This costs can be separated, or can be calculated together.

 

Capital Costs

Refer to this resource for a list of the different energy sources and their estimated capital costs (cost to construct) – https://en.wikipedia.org/wiki/Cost_of_electricity_by_source#Levelized_cost_of_electricity

From cheapest to most expensive:

  • gas/oil combined cycle power plant – $1000/kW 
  • onshore wind – $1600/kW
  • solar PV (fixed) – $1060/kW (utility), $1800/kW
  • solar PV (tracking)- $1130/kW (utility) $2000/kW
  • battery storage – $2000/kW
  • conventional hydropower – $2680/kW
  • geothermal – $2800/kW
  • coal (with SO2 and NOx controls)- $3500-3800/kW
  • advanced nuclear – $6000/kW
  • offshore wind – $6500/kW
  • fuel cells – $7200/kW

 

  • Upfront costs of renewables can be expensive, but the lifetime costs drop renewable energy sources to the same level of cheaper than fossil fuels
  • Read more at https://www.ucsusa.org/clean-energy/renewable-energy/barriers-to-renewable-energy#bf-toc-0

 

Running/Operation Costs

  • Fuel costs can be given per kWh and tend to be highest for oil fired generation, with coal being second and gas being cheaper. Nuclear fuel is very cheap per kWh (wikipedia.org)

Renewable energy tends to be very cheap to run because usually fuel (that is converted into electricity) doesn’t cost anything e.g. water, sun, wind are all freely available. However, renewable energy sources can be more labor intensive for renewables compared to fossil fuels, and this must be a consideration in operational costs.

 

LCOE (Levelized Cost Of Electricity) Of Each Energy Source

LCOE is essentially the cost to produce one unit of electricity (usually in $ per kWh) over the lifetime of production.

It takes into consideration investment, operations and maintenance costs, fuel, electrical energy generated, discount rate, and expected lifetime of the electricity producing asset.

Adding up the cost and discount factors, it is one common way to compare the different energy sources and their costs to produce the same unit of electricity.

 

  • LCOE is … the net present value of the unit-cost of electrical energy over the lifetime of a generating asset
  • … the LCOE is calculated over the design lifetime of a plant, which is usually 20 to 40 years, and given in the units of currency per kilowatt-hour or megawatt-day

– wikipedia.org

 

An estimate of the LCOE of different energy sources in the US in 2018 was:

  • Hydro – 39.1 (LCOE in $/MWh)
  • Solar PV – 45.7
  • On Shore Wind – 49.8 
  • Gas Combined Cycle – 46.3-67.5
  • Nuclear – 77.5
  • Biomass – 92.2
  • Coal – 98.6-104.3

The full table and supporting information can be accessed at https://en.wikipedia.org/wiki/Electricity_pricing

 

Global, national and regional LCOE estimates and calculations can be viewed at https://en.wikipedia.org/wiki/Cost_of_electricity_by_source#Levelized_cost_of_electricity

LCOE’s differ in different places in the world – by country, by region, by State, by city, and so on.

 

Increasingly, old coal and gas plants are running at a higher LCOE than hydro, and new solar and wind technology (solar and wind are dropping in cost).

 

The Limitations Of LCOE

LCOE doesn’t take into consideration:

  • Dispatchability, the ability of a generating system to come online, go offline, or ramp up or down, quickly as demand swings.
  • The extent to which the availability profile matches or conflicts with the market demand profile.

– wikipedia.org

 

  • The LCOE measure tries to evaluate the lifetime cost of lifetime energy production, from initial build to fuel use and maintenance to decommissioning. Despite its ambitious nature, an LCOE calculation has significant shortcomings, however. It does not consider quality in its formulation. Sometimes, the cheapest option is not the best option, as anyone shopping in a discount store knows, and as we can see by comparing polluting coal-fired power stations to slightly more expensive nuclear power plants.
  • More importantly, it does not measure power availability matching to the demand profile. In South Africa, demand peaks in the early evening, between 5pm and 8pm. Solar power availability, by contrast, peaks around lunchtime and produces nothing before 7am or after 6pm (as measured in August). LCOE does not factor in this cost, whether it is addressed by backup power sources or power storage solutions. It also does not account for grid integration, or the cost of acquiring vast tracts of land for solar or wind farms.

– dailymaverick.co.za

 

Renewable Energy Technology Is Consistently Getting Cheaper

Especially over the last few decades, the price of renewable energy (solar and wind specifically) in many different countries, is getting cheaper.

Increased investment and demand, along with development and newer improved technology is pushing the price of technology down. 

 

  • As technology and economies of scale improve over time, the initial capital cost of building an energy generator decreases. This is known as the “learning rate”. Improvements in technology are expected to reduce the price of renewables more so than coal in coming years

– theconversation.com

 

  • [In Australia … ]
  • The price of solar has been falling at the rate of 26 per cent since 1979, every year, and it continues to do so. So our ability to afford this has become much better in the last couple of years …
  • “In about 2013-2014, solar started to compete with traditional energy generating technologies”
  • By 2015 it was clear it was well on par and in 2017 there is no doubt that solar is the cheapest form of electricity you can make.

– abc.net.au

 

  • renewable energy capital costs have fallen dramatically since the early 2000s, and will likely continue to do so.
  • For example: between 2006 and 2016, the average value of photovoltaic modules themselves plummeted from $3.50/watt $0.72/watt—an 80 percent decrease in only 10 years.

– ucsusa.org

 

  • Renewable energy sources, notably solar and wind, are reaching price and performance parity on-and-off the grid
  • Three key enablers – price and performance parity, grid integration, and technology – allow solar and wind power to compete with conventional sources on price, while matching their performance. As technologies, including blockchain, artificial intelligence (AI) and 3D printing continue to advance the deployment of renewables, prices will likely continue to fall, and accessibility will improve
  • Australia has the lowest cost for solar PV and Africa has the highest due to investment costs
  • South Australia, along with China has the lowest unsubsidised, levelised cost of energy (LCOE) for concentrating solar power
  • China, the United States and Germany have already reached price parity for certain renewable sources
  • [Smart renewable cities, community energy, emerging markets, and corporate involvement are driving demand for renewables]

– deloitte.com

 

Fossil Fuel Technology Is Getting More Expensive

Old coal and fossil fuel power plants were cheaper in decades gone by compared to modern power plants.

Modern fossil fuel power plants and technology are getting more expensive with new generation power plants, air pollution control devices, and expensive technology like CCS. Clean coal technology is also getting more expensive, along with new plant types like super critical and ultra critical coal plants.

Something else that has to be considered is carbon prices/carbon taxes, and polluters tax that may be more heavily enforced in the future – both of which can hit fossil fuel plants harder than renewables.

 

  • [Now, in Australia, coal fired power stations and gas turbines cost more to produce electricity compared to solar farms, when built from brand new]
  • [Capital investment costs for fossil fuel plants compared to 60 years ago are very different]

– abc.net.au

 

  • [in the future, a carbon price in Australia could put super critical and ultra critical coal plants up to a LCOE of around $100 per MWh $80 per MWh … and this is in comparison to a completely renewable electricity system at $75-80 per MWh]

– theconversation.com

 

Other Cost Factors To Consider With Different Energy Sources – Indirect, & External

Other than capital and operational/running costs (which are the main costs discussed in most studies and publications), there are indirect and external costs to consider with renewable energy, compared to fossil fuels and nuclear. These indirect and external costs can be harder to calculate, but should certainly be considered.

These indirect and external costs include, but aren’t limited to:

  • Infrastructure costs
  • Other infrastructure support costs
  • Environmental costs (and cost of addressing them)
  • Social/health costs (and cost of addressing them)
  • Miscellaneous costs 

 

Infrastructure Costs

Infrastructure includes things like poles, wires, the design and capacity of the electricity grid, interconnectors, and so on. Anything that facilitates the transmission and delivery of electricity from the generation site to the end user.

Infrastructure costs are unavoidable – there is always infrastructure being built new, upgraded, repaired and replaced, even for existing power stations and to meet future electricity demand. But, there can be new infrastructure needed for new energy sources, or at least a modification to what is already there.

Renewables like solar and wind in particular present challenges with variability/intermittency, and balancing power loads and capacities at different times.

 

  • we can make use of existing infrastructure as much as we can … but we still need [some] new infrastructure [for new energy sources]

– abc.net.au

 

  • … investment costs associated with replacing old and retiring infrastructure with new plant, in one of the most capital-intensive industries, are significant and unavoidable.
  • … improving interconnection across the NEM will allow energy resources to be better utilised, both by providing access to lower-cost sources of energy and increasing the diversity of generation with different profiles and different locations
  • [there might be a number of good renewable energy zones across an existing energy grid, but a number of new ones might need to be created or accessed to replace existing or retiring fossil fuel generators]

– arena.gov.au

 

  • [renewable energy may lead to] smaller increases in the cost of maintaining power poles and wires and green schemes [but may be offset by lower wholesale power prices]

– abc.net.au

 

[there may be changes to] the way new transmission lines and interconnectors are built [or planned, to allow renewables to connect to the grid in a better and cheaper way]

These changes may include:

  • Speeding-up and streamlining regulatory approvals and cost-benefit analysis for new transmission infrastructure
  • Managing congestion on the power grid so the cheapest power can get to consumers
  • Allowing generators to pay for transmission infrastructure in exchange for access to it
  • Facilitating “renewable energy zones”
  • Making it easier for large-scale storage systems like batteries to connect to the grid

– abc.net.au

 

  • [Residential renewable energy solar setups in Australia may present future problems for the electricity grid]
  • Victoria’s energy grid simply wasn’t designed to cope with a system where each house can feed its own electricity back into the network
  • It actually does hurt the stability of the grid … particularly in the mid-afternoon where there’s very low demand
  • … smart household batteries will solve many of the problems
  • [Additionally, new wind farms present some problems to infrastructure]
  • … [existing] transmission lines are thin and can’t handle more power coming into the system
  • [so we may see] transmission lines … upgraded to allow for increased renewable energy generation

– abc.net.au

 

  • [Some of the indirect costs for renewables comes from] their intermittency and the need to build additional transmission lines and generation, most commonly gas-fired turbines, to provide electricity when the wind doesn’t blow and the sun doesn’t shine
  • [additional costs are] grid-scale batteries

– forbes.com

 

  • … [In Australia] most renewable energy – like that generated by wind and solar – is intermittent, and needs to be “balanced” (or backed up) in order to be reliable. This requires investment in energy storage. We also need more transmission lines within the electricity grid to ensure ready access to renewable energy and storage in different regions, which increases transmission costs.
  • And, there are additional engineering requirements, like building “inertia” into the electricity system to maintain voltage and frequency stability. Each additional requirement increases the cost of electricity beyond the levelised cost.

– theconversation.com

 

Support Costs

  • Renewables in particular need either backup energy sources like combined cycle gas turbines that can ramp up and down quickly.
  • AND/OR, energy storage batteries that can store energy for later use (like the big battery installed in South Australia recently – the biggest of its kind at the time). These batteries need to be connected to the grid

 

  • [to deal with capacity issues for a solar farm in Mildura in Australia, a] massive machine [was added], known as a synchronous condenser, to the project. It can balance the energy output and protect the grid
  • The downside is it’s a hugely expensive piece of equipment
  • [a large number of new renewable energy projects can increase] the complexity of every connection in the market

– abc.net.au

 

  • [In Australia] the addition of pumped-hydro storage and extra network construction would add a levelised cost of balancing of A$25-30 per MWh to the levelised cost of renewable electricity

– theconversation.com

 

Environmental Costs

Polluting energy sources, or dirty energy sources, can lead to a range of environmental issues.

Two of the most significant are greenhouse gas emissions contributing to climate change, and air contaminants leading to air pollution.

But, there are others like water pollution, ocean warming and acidification, acid rain, and so on.

There are financial costs to address and clean up these environmental issues.

Read about the economic benefits of renewable energy when it comes to saving money on addressing environmental issues.

 

Social & Health Costs

There can also be costs of addressing the social and health issues caused by different energy sources.

One of the most significant social/health issues caused by some fossil fuel energy sources is caused by outdoor air pollution. It can lead to higher mortality rates and several different health problems.

Read more about the potential costs of air pollution in this guide.

 

Miscellaneous Costs

There can be other miscellaneous costs indirectly borne by society as a whole as a consequence of using that energy source.

Some of these might include:

Higher Electricity prices

  • In Denmark, Germany, Belgium and other countries – caused by renewable and green energy taxes/subsidies, and costs to support renewable portfolio standards and renewable energy credit (REC) programs

Read more about whether renewable energy causes higher electricity prices in this guide.

 

Additional and external cost factors are outlined at https://en.wikipedia.org/wiki/Cost_of_electricity_by_source#Levelized_cost_of_electricity 

 

Also, there are some good weighted costs (taking into consideration more than just LCOE) of different energy sources at https://theconversation.com/renewables-will-be-cheaper-than-coal-in-the-future-here-are-the-numbers-84433

 

Renewable Energy Might Be More Of An Investment Than A Cost (Compared To Other Energy Sources) In The Long Term

Lastly, a cost is different to an investment in a general sense.

An investment provides additional benefits along with a service or product, where as a cost usually just delivers the service/product.

It could be argued that the short term costs and challenges to transition to renewables is a worthwhile investment for the long term future.

However, the social/health, environmental and economic benefits have to be weighed up against the drawbacks, and compared to fossil fuels and nuclear options.

Read more about the importance of, and full list of benefits of renewable energy in this guide.

 

Forbes.com (from Stanford University, the National Bureau of Economic Research and Woods Hole) puts it this way:

  • the longer we wait to decarbonize our economy, the more dramatically future GDP will decline

 

Sources

1. https://www.abc.net.au/news/rural/2017-06-12/refocus-needed-for-total-renewable-energy-solar-future/8609890

2. https://www.ucsusa.org/clean-energy/renewable-energy/barriers-to-renewable-energy#bf-toc-0

3. https://arena.gov.au/blog/renewables-lowest-cost-aemo/

4. https://www2.deloitte.com/au/en/pages/media-releases/articles/declining-costs-technology-powering-renewable-energy-demand-new-deloitte-report-130918.html

5. https://www.forbes.com/sites/andystone/2019/04/30/clean-energy-is-an-investment-not-a-cost/#759bd7083c82

6. https://www.abc.net.au/news/2018-12-21/power-prices-to-drop-with-more-renewables-report-finds/10638102

7. https://www.abc.net.au/news/2018-10-26/victorias-renewable-energy-boom-could-burn-electricity-market/10405210

8. https://theconversation.com/renewables-will-be-cheaper-than-coal-in-the-future-here-are-the-numbers-84433

9. https://en.wikipedia.org/wiki/Cost_of_electricity_by_source#Levelized_cost_of_electricity

10. https://en.wikipedia.org/wiki/Electricity_pricing

11. https://www.dailymaverick.co.za/opinionista/2019-08-13-mantashe-is-right-south-africa-must-build-more-nuclear-energy/

12. https://www.bettermeetsreality.com/importance-renewable-energy-benefits-advantages-social-environmental-economic-health/

13. https://www.bettermeetsreality.com/does-renewable-energy-make-electricity-cheaper-or-more-expensive/

14. https://www.bettermeetsreality.com/economic-impact-benefits-of-renewable-energy-clean-energy/

15. https://www.bettermeetsreality.com/does-clean-coal-have-a-future-is-it-feasible-practical/

Is Renewable Energy Reliable? (Wind, Solar, Hydro, Geothermal, Biomass & More)

Is Renewable Energy Reliable? (Wind, Solar, Hydro, Geothermal, Biomass & More)

In this guide we outline whether renewable energy is reliable or not.

We look at the general reliability of renewable energy sources, as well as looking as real world examples of how renewable energy is being used, and the impact it is having on reliability of energy supply.

 

Summary – Is Renewable Energy Reliable?

  • It depends on the type renewable energy source 
  • It also depends on how each renewable energy source is used as part of overall energy and electricity systems (to supply an electricity grid) – with other renewables, or with other energy sources like fossil fuels and nuclear. Renewables don’t function individually, but with other renewables or other energy sources as a part of a whole grid or system
  • Solar and wind in particular are seen as variable and intermittent/variable sources of renewable energy on their own, but can perform well in a flexible and diverse energy system. When people talk about unreliable forms of renewable energy, solar and wind are usually what they are talking about due to this variability and intermittency
  • Hydro and geothermal (along with bioenergy) are seen as more reliable and consistent sources of renewable energy on their own, but particularly hydro, as long as there is adequate water storage or running water sources (from a river for example)
  • But, each of these energy sources are used differently in different States and countries around the world, with different levels of reliability, in different energy grids
  • For example, one country may have a different energy mix and electricity systems than another, along with a more reliable electricity supply. Further to that, energy mixes and reliability of electricity systems can vary from State to State within one specific country
  • It also depends how you define reliability
  • Renewable energy can be reliable in some specific ways, but unreliable in other broad ways (and cause other reliability related problems)
  • There can be side effects to increasing renewable energy supply, such higher electricity prices. So, this must be considered along with reliability (reliability is not the only consideration)

 

Definition Of Reliability In Relation To Electricity

From arena.gov.au:

  • Security and reliability are terms used to discuss the strength and stability of the electricity grid, also known as an electric power ‘system’.
  • The security of an electricity grid is its technical resilience (or strength), namely its ability to quickly respond and remain stable when unexpected events occur. Examples of such events include generators breaking down or transmission lines failing.
  • Reliability is the ability of an electric power system to deliver electricity in the quantity and quality demanded by energy users.

 

The Reliability Of Real Life Electricity Grids Using Renewable Energy – Germany, Denmark, Australia

Germany and Denmark both use an increasing amount of renewables for their electricity.

 

Germany

Germany’s annual power supply interruption has decreased from 2006 to 2017:

  • When systematic monitoring started in 2006, average outage times exceeded 20 minutes. In the same period, the share of renewable electricity production in Germany rose from 11.3 to 33.1 percent, mostly from fluctuating sources such as wind and solar power stations
  • [In 2016, interruptions have decreased all the way down to 12.8 minutes]
  • [Germany still has one of the most reliable electricity grids in the world in 2016, along with Denmark, Switzerland, Luxembourg and the Netherlands]

– cleanenergywire.org

 

Denmark

  • In 2016, Switzerland, Germany and Denmark has some of the most secure electricity supplies in Europe

– cleanenergywire.org

 

  • Coal fired generation has proved to be reliable, but so has renewable energy.
  • Denmark has just about the highest renewable share and the most reliable supply in Europe.

– reneweconomy.com.au

 

  • Whilst households in Denmark pay some of the highest electricity prices around, the electricity supply is ranked as one of the best in the world with an index score of 6.8 out of a possible 7. Only Scandinavian neighbor Norway, Singapore and Switzerland had a higher ranking than Denmark in 2018.

– statista.com

 

Australia

  • … the overwhelming majority of [power] outages in Australia – more than 97 per cent – are caused by faults in the local network, such as transformers failing or trees falling on wires. They have nothing to do with renewables

– reneweconomy.com.au

 

South Australia

  • [Over the last summer in 2017], with 50 per cent wind and solar, South Australia can lay claim to having the most reliable grid in the country. Unlike the previous summer, with severe weather events and mis-steps by the market operator, there were no major outages
  • [South Australia has seen] the introduction of Australia’s first, and the world’s biggest, utility scale lithium-ion battery at Hornsdale, which has demonstrated speed and versatility unseen before in the grid

– reneweconomy.com.au

 

The % Of Solar & Wind Supplying Electricity Can Matter When It Comes To Reliability

Ucsusa.org outlines that different studies have found that different regions, individual States, and the entire country of the United States as a whole can take on different % shares of solar and wind making up their electricity supply, while still maintaining reliability.

For example, that number for California might be 40 to 50% by 2030, and for the United States as a whole, that number might be 80% by 2050.

 

Reliability Is Only One Feature, Or Consideration To Make, With An Energy Or Electricity System (& When Adding More Solar & Wind)

Reliability of electricity supply is only one feature to consider when incorporating and adding more solar and wind to an energy system or electricity grid.

Adding more solar and wind can impact the overall cost of electricity generation.

It also has the ability to increase electricity prices fairly significantly. And, there are social and environmental consequences of adding and reducing different energy sources in an energy mix. 

Germany for example has reportedly dealt with overcapacity, high electricity prices, blackouts, increased carbon emissions in some years from the use of gas plants to provide electricity when solar and wind are not producing, and various other issues.. The infrastructure and funding has to be there to make a renewable transition smooth and not laden with problems.

Denmark also has some of the highest electricity prices in the world.

So, reliability is only one of many features, and overall pros and cons to consider, with changing any energy or electricity system.

 

How Solar & Wind Are Growing, While Maintaining Reliability Of Electricity Supply

There are a variety of practices that are being implemented by utilities and grid operators to maintain the reliability of solar and wind for a steady electricity supply:

  • Spreading wind farms and generation sites out across a broader geographic area, so that there isn’t a reliance on one site or geographic location for it’s wind conditions
  • Forecasting solar and wind output with better accuracy so energy sources can be adjusted as required (depending on forecasted output)
  • Drawing on other energy sources like hydro and natural gas (which is quick starting/ramps up quickly) when wind and solar supply diminishes [these are known as backup sources of power]
  • Designing the electricity grid to deal with variability in supply and demand from all energy sources. Even coal and nuclear experience interruption sometimes due to different factors

– ucsusa.org

On top of these things, other ways to address the variability of solar and wind might include energy storage batteries, and complementary energy storage sources like pumped storage hydro.

For example, emerging energy storage technologies are … poised to make it possible to store electricity for use when the wind does not blow and the sun does not shine (ucsusa.org)

 

  • Renewable energy opponents love to highlight the variability of the sun and wind as a way of bolstering support for coal, gas, and nuclear plants, which can more easily operate on-demand or provide “baseload” (continuous) power. 
  • Solar and wind are highly predictable, and when spread across a large enough geographic area—and paired with complementary generation sources—become highly reliable. Modern grid technologies like advanced batteries, real-time pricing, and smart appliances can also help solar and wind be essential elements of a well-performing grid
  • Tests performed in California, which has some of the highest rates of renewable electricity use in the world, provide real-world validation for the idea that solar and wind can actually enhance grid reliability

– ucsusa.org

 

ARENA is working on solutions in Australia to deliver reliability to the electricity system. These solutions may include:

  • The growing share of renewable energy in the [Australian] national electricity grid is producing technical challenges that must be overcome … but there are solutions
  • … reducing or shifting energy demand to meet supply, improving information about electricity production and use, and developing ways to access or store renewable energy for use when it is needed.
  • … they may also include collaborating on projects with energy businesses to examine new ways to empower energy consumers that will deliver reliable renewable energy, and with policy makers to determine whether laws governing the electricity market should be changed to encourage reliable supply.

– arena.gov.au

 

Also in Australia, ways to deal with intermittent solar and wind energy might include:

  • a ‘dispatchable’ generator that can increase or reduce its output as required
  • develop a coherent emissions and energy policy
  • … In South Australia [which experienced a blackout] – management practices were changed to better suit the changing shape of the energy system, and a combination of regulatory obligations and market mechanisms are being applied to support grid stability as the system continues to evolve … [This] involved a combination of demand management, battery storage, and – for the first time in the recent heat-wave that hit South Australia in late January – the use of the emergency back-up generators

– reneweconomy.com.au

 

Responding To Common Reliability Claims Against Renewables

Huffpost.com clears up some common reliability claims about renewables:

  • Reliability is not a function of individual generation technologies, but a function of the electricity system as a whole – [how an individual renewable energy functions on it’s own doesn’t matter as much as how it functions as part of an overall electricity system] … “renewable energy” is not a single energy source, but roughly speaking six: solar, wind, biomass, geothermal, hydro, and ocean. Of these, only wind and solar are “variable;” the rest are capable of being dialed up or down when needed – “dispatchable” in industry parlance … [Also,] There are many ways of managing variable electricity technologies within the broader mix. This is hardly surprising given that grid operators have been dealing with variability since the birth of electricity distribution over one hundred years ago, for the simple reason that demand always varies
  • Base Load Is Not Essential – [it is often said that we need baseload from energy sources like nuclear and coal]. [But, baseload is not always necessary]. What we do need are power systems that can match supply and demand in a more concerted and flexible way. Flexibility is key.
  • Supply From The Grid Always Has To Match Demand From Consumers – [this may not always be the case as in the future the power grid could act as a backup to] individual households, communities and global companies producing and managing their own electricity supply and demand. [Several countries around the world are already producing electricity from renewables without battery storage]. [As an example] 41 per cent of Danish electricity demand was met with wind (roughly 39 per cent) and solar (2 per cent) last year [in 2016], and expectations are that this number will rise to nearly 90% in the next nine years.

 

Is Solar Energy Reliable?

Solar is generally seen as an intermittent and variable energy source.

It can be reliable in an electricity system that is set up the right way with the right infrastructure, design, and balance of other complementary energy sources.

Strata.org says solar is not a reliable energy source though.

 

Is Wind Energy Reliable?

Wind is generally seen as an intermittent and variable energy source.

It can be reliable in an electricity system that is set up the right way with the right infrastructure, design, and balance of other complementary energy sources.

Strata.org says wind is not a reliable energy source though.

 

Is Hydro Energy Reliable?

Hydro is generally seen as a reliable energy source as long as there is stored water or running water to draw upon.

Strata.org says hydro energy is generally a reliable energy source, but there can be challenges to using it.

 

Is Geothermal Energy Reliable?

Strata.org says that geothermal is physically reliable and more environmentally friendly than fossil fuels, but it is not economically reliable without government subsidies in many cases

 

Is Bioenergy Reliable?

There are many different types of bioenergy.

Strata.org says that biomass is expensive, inefficient, and environmentally damaging.

 

Sources

1. https://www.ucsusa.org/clean-energy/increase-renewable-energy/fact-renewable-energy-is-reliable

2. https://www.strata.org/reliability-of-renewable-energy/

3. https://arena.gov.au/renewable-energy/system-security-reliability/

4. https://www.huffpost.com/entry/post_b_8716758

5. https://www.theguardian.com/commentisfree/2019/jan/28/what-would-australia-look-like-powered-by-100-renewable-energy

6. https://reneweconomy.com.au/blaming-renewables-for-reliability-issues-is-wrong-and-dangerous-43132/

7. https://reneweconomy.com.au/five-myths-about-south-australias-renewable-energy-59004/

8. https://www.ucsusa.org/clean-energy/renewable-energy/barriers-to-renewable-energy#bf-toc-4

9. https://www.cleanenergywire.org/factsheets/germanys-electricity-grid-stable-amid-energy-transition

10. https://reneweconomy.com.au/does-more-renewable-energy-mean-higher-prices-10310/

11. https://www.dailymaverick.co.za/opinionista/2019-08-13-mantashe-is-right-south-africa-must-build-more-nuclear-energy/

12. https://www.statista.com/statistics/418075/electricity-prices-for-households-in-denmark/

13. https://www.bettermeetsreality.com/electricity-prices-in-countries-that-use-the-most-least-renewable-energy-for-electricity/

Does Renewable Energy Make Electricity Cheaper, Or More Expensive?

Does Renewable Energy Make Electricity Cheaper, Or More Expensive?

There can be a lot of debate around this question …

Does renewable energy make electricity cheaper or more expensive?

In this guide, we provide a general summary to the question, as well as looking at examples around the world where renewable energy is used for electricity production and seeing what the impact on electricity prices are.

 

Summary – Does Renewable Energy Make Electricity Cheaper, Or More Expensive?

  • Renewable energy is only one of many factors that can impact electricity prices on the national (country wide) or State (one State of a country) level (… renewable energy may have a large impact, or a smaller impact, in conjunction with a range of other factors)
  • Ultimately, what impacts electricity prices is country, State and often city specific – as there are different factors and variables (direct vs indirect, short term vs long term, small picture vs big picture, and so on) impacting electricity prices at any one time in any one place. For example, the factors impacting electricity prices in California may be different to other States in the United States
  • There are countries and States in the world with renewable energy in their electricity mix that have higher than average electricity prices. In some of these countries and States, there is strong evidence that the introduction and expansion of renewable energy into the energy mix has correlated with electricity prices increasing significantly. Some of this increase might be from the overall service of providing electricity from energy sources that include renewable energy, while some of this increase can be from renewable or green energy related taxes and subsidies, or support schemes that customers have fund as part of their electricity bills
  • Some countries and States in the world have seen their electricity prices increase because of several other factors other than renewable energy, such as overall lack of supply of electricity compared to demand, high costs of electricity generation (such as high gas prices), network and infrastructure investment and costs (poles, wires, transmission equipment), and other factors
  • There are also countries and States that have experienced no real change with electricity prices, or even more competitive electricity prices with renewable energy in their electricity mix
  • The type of renewable energy should be specified and considered individually when asking if renewable energy increases or decreases electricity prices – some countries and States may find some types of renewable energy like hydropower to be more cost effective than other renewable energy sources like solar and wind (just as a theoretical example). Solar and wind for example are variable sources of energy, compared to hydropower which may function differently and provide a more constant supply of power
  • Electricity is a constantly evolving and developing sector. Solar and wind technology costs and capital costs in particular may continue to drop in the future, and this may lead to further electricity price drops. Coal and other fossil fuels may get more expensive with requirements for environmentally friendly plants (that minimise carbon and air pollution emissions), carbon penalties/taxes, polluters taxes, and more. These are just considerations though.
  • Overall, the presence of renewable energy in an energy mix for electricity is just one factor that can impact electricity prices. There are other factors that can also impact electricity prices (each factor may impact electricity prices to different extents). To find out what exactly is impacting electricity prices in a specific place over a specific time period, an individual assessment or report for that location and time period is required. It doesn’t seem accurate enough to generalise that renewable energy does or doesn’t impact electricity prices in a specific way.

A good way to summarise an answer to this question might be (from finder.com.au):

  • Electricity prices have become a political hot potato …
  • Electricity retailers find fault with governments, and renewable energy advocates point the finger at the nasty old fossil-fuel generators. The right-wing commentariat blames renewables, while the federal government blames everyone but itself.
  • The truth is there is no silver bullet. No single factor or decision is responsible for electricity prices … Rather, it is the confluence of many different policies and pressures at every step of the electricity supply chain.

Also, from energycouncil.com.au:

  • Despite the impact of renewable charges on electricity bills it remains one component of many and is not always the cause of higher prices

*Note – this guide is mainly about retail electricity prices, and not wholesale, commercial or industrial prices. Also note, some households have their own solar, or other type of renewable energy set up. This guide considers electricity from the grid only. Providing power from an individual set up would obviously require a comparison of set up and running costs, feed in credits, taxes, and other factors, compared to obtaining electricity from the grid only.

 

General Factors, & Country & State Specific Factors That Can Impact Electricity Prices

We have written about these factors in the following guides:

As you can see, different countries and States have different factors that might be impacting their electricity prices in a major way at any one time.

For example, places like Denmark, Germany and Belgium look to have significant taxes related to renewable or green energy development and support attached to their electricity prices. Phasing out and closing down of competitive or low cost energy sources (in favor of renewable energy) such as nuclear could also be an issue.

Whereas, a place like South Australia may be suffering from other problems such as government energy policy in need of improvement, high network (poles and wires) costs, paying premium prices for existing energy sources (which are also restricted in supply in numerous ways, and pushing prices up as demand increases), inefficient and/or old existing power plants, and so on.

If you want to do your own assessment on your own State or country, this guide may help you in determining what factors might be most responsible for impacting electricity prices where you live.

 

Electricity Prices In Countries That Use The Most & Least Renewable Energy For Electricity

From this list, we can see that not all the countries who use the most renewable energy as part of their electricity generation energy source mix have the highest electricity prices, and vice versa for countries that use far less renewable energy for their electricity generation.

But, some countries with higher renewable energy share of electricity generation do have higher than average electricity prices, and some of them very high prices.

In general, you can see some electricity prices worldwide for notable countries, which can be a good guide for comparison with the above guide.

 

Electricity Prices & Renewable Energy Share Of Electricity In The States Of Different Countries

Likewise, when we break it down to State level from the national level, not all the States in Australia and the United States respectively who use the most renewable energy as part of their electricity generation energy source mix have the highest electricity prices, and vice versa for countries that use far less renewable energy for their electricity generation.

But, some States with higher renewable energy share of electricity generation do have higher than average electricity prices, and some of them very high prices.

 

Different Renewable Energy Sources Can Have Different Impacts On Electricity Prices

In general terms (without looking at the different compositions and makeup of each electricity system worldwide) …

Hydropower has traditionally been seen a low cost way to provide consistent power (when water supplies aren’t variable and there is water available year round).

Solar and wind though are variable sources of energy – their power supply can peak and dip with the weather conditions. Some energy grids are set up in such a way that variable energy sources complement each other, but others may require additional measures like energy storage in the form of batteries, energy sources with energy storage (like pumped hydro), or simply other energy sources to provide more power in times of higher energy demand.

The problem with variable energy sources (that need additional support mechanisms) is that huge commercial energy storage batteries are expensive, and other energy sources may have to restrict their own supply capacity and have to ramp up quickly when required (both of which can impact profits and return on investment for these energy suppliers). Furthermore, surplus electricity from variable energy sources like solar or wind may cause overcapacity issues, and suppliers or governments may even have to pay other States or countries to take their surplus electricity. This is not to mention upgrades to the existing energy grid infrastructure that have to be made for additional or different energy sources being integrated to it.

For these reasons and others, different types of renewable energy can have a different impact on electricity prices.

 

Renewable Energy Providing Electricity As A Service, &, Going Beyond The Capital & Operating Cost Of An Energy Source

LCOE stands for the levelised cost of electricity.

It summarises the lifetime cost to generate one unit of electricity for an individual energy source.

Hydro, solar and wind can have low a LCOE because the cost to operate them is low during operation (because fuel like coal, gas or oil doesn’t have to be purchased).

What some people automatically think is that because an energy source has a low electricity generation cost, that it means the electricity produced from that source will be cheap as well.

But, as we covered in the above guide on the general factors that impact electricity prices, the cost to generate electricity is just one factor that can have an impact.

Further to that, the cost to generate electricity (capital, and operation costs) is not the only cost – there is the cost to get the electricity from a power plant or power generation site, to the end user. This involves the power grid, infrastructure, and whatever supporting capital and services you need to deliver power from that energy source. There’s also other costs added to the final electricity price, such as cost by the retailer, taxes, and so on.

Existing fossil fuel and nuclear energy might not only be able to provide electricity to the end user without adding supplemental energy sources like some renewables might need, but are often set up to provide electricity by the existing electricity grid without the need to upgrade or change the grid in any major way (like renewables might need).

So, electricity should be look at like a comprehensive service with many factors that make up the delivery of that service. Those factors and the overall requirements to deliver the service can change with different energy sources used to generate the electricity.

 

Remember, More Expensive Electricity May Come With Benefits

More expensive electricity is not necessarily a bad thing.

Like all products and services, increased price can be a feature of added benefits.

More expensive electricity might also mean:

  • Better Quality/Reliability – for example, Denmark has one of the best rated electricity services in the world according to some indexes.
  • Environmental & Social Benefits – for example, fossil fuels have often been linked to air pollution (and consequential human health problems and higher mortality rates), and greenhouse gas emissions that contribute to climate change. Greener energy and renewable energy might be more expensive in some cases, but may also be better environmentally and socially by addressing these problems and others.

The obvious point here is that if there is a higher price for electricity, the higher price has to be linked in a clear and transparent way to that increased price.

 

But, Very Expensive Electricity Can Also Be A Sign Of Problems 

On the flip side, expensive electricity can be a sign of things like:

  • Lack of supply of electricity compared to demand
  • Not enough competition amongst different electricity suppliers and retailers
  • A regulated monopoly – the government forcing electricity prices a certain way based on regulations or other methods of control and restriction

These factors and more can be signs of an unhealthy electricity sector that isn’t functioning in a competitive, fair or free (as opposed to restrictive) way.

 

The Potential Future Of Electricity

Electricity, like all sectors, will change in various ways in the future.

Some factors to consider in the future that may impact on electricity prices and the various energy sources that provide electricity are:

  • New coal plants might be getting more expensive
  • CCS (carbon capture storage and use) technology for fossil fuels might be prone to failure, and is expensive
  • Air pollution technology for fossil fuel plants cost additional money
  • Carbon prices and taxes, and polluters tax can increase the price for fossil fuels that were previously cheaper to set up and run
  • Solar and wind technology, with continual investment and demand, are expected to continue to drop in price – potentially passing cost savings onto the end consumer
  • Distributed (as opposed to utility) solar could help move some electricity generation from the main grid to independent users and individuals
  • There’s still untapped potential in some energy sources like offshore wind, pumped hydro, and other energy sources

You can read more in these guide about the considerations of moving towards renewable energy, and the challenges in moving towards renewable energy.

There’s also this guide that outlines whether it’s possible to completely replace fossil fuels with renewable energy.

 

In Australia, looking to the future in the electricity sector as an example:

  • The cost to decarbonise the electricity system is lower than the cost of replacing the existing power system [of existing coal fired generation with new coal fired generation] like for like.
  • Remember there are costs of not decarbonizing [too]
  • Three priorities in the future that will require investment will be 1. Reducing emissions 2. Replacing the existing coal fleet and coal mines, and 3. Increasing supply of power stations to reduce risk and increase reliability of electricity supply

– reneweconomy.com.au

 

Potential Solutions For Making Electricity Prices More Affordable In Different Countries & States In The Future

Check out this guide:

What is interesting to note from that guide, is, a place like Denmark has come out and said that as their renewable energy supply has increased, there may be little reason for their taxes on electricity to remain so high given that renewable energy share of electricity is now at a certain level.

So, we have to ask the question – what are we paying for in our renewable or green energy electricity taxes, and at what point have they served their goals or purpose?

 

Sources

1. https://www.bettermeetsreality.com/factors-that-impact-electricity-prices-what-causes-them-to-increase-decrease/

2. https://www.bettermeetsreality.com/causes-of-high-or-increased-electricity-prices-in-different-countries-states-around-the-world-case-studies-examples/

3. https://www.bettermeetsreality.com/electricity-prices-in-countries-that-use-the-most-least-renewable-energy-for-electricity/

4. https://www.bettermeetsreality.com/how-to-determine-what-is-causing-electricity-prices-to-increase-decrease-in-specific-countries-states-a-step-by-step-guide/

5. https://www.bettermeetsreality.com/electricity-prices-in-countries-that-use-the-most-least-renewable-energy-for-electricity/

6. https://www.bettermeetsreality.com/countries-with-the-most-expensive-cheapest-electricity-prices-electricity-prices-around-the-world/

7. https://www.bettermeetsreality.com/comparison-by-australian-state-renewable-energy-of-electricity-production-vs-average-electricity-price/

8. https://www.bettermeetsreality.com/comparison-by-us-state-renewable-energy-of-electricity-production-vs-average-electricity-price-vs-co2-emissions-vs-air-pollution/

9. https://www.bettermeetsreality.com/solutions-for-making-electricity-prices-cheaper-more-affordable-in-different-countries-states/

10. https://www.bettermeetsreality.com/challenges-problems-with-transitioning-to-renewable-energy/

11. https://www.bettermeetsreality.com/can-renewable-energy-replace-fossil-fuels-meet-demand-power-the-world-moving-towards-100-renewable-energy/

12. https://www.bettermeetsreality.com/transitioning-towards-renewable-energy-solutions-strategies-considerations/

13. https://www.finder.com.au/australian-electricity-prices-rising-decade

14. https://www.energycouncil.com.au/analysis/electricity-prices-around-the-world-what-is-the-impact-of-renewable-charges/

15. https://reneweconomy.com.au/does-more-renewable-energy-mean-higher-prices-10310/

Comparison By Australian State: Renewable Energy % Of Electricity Production vs Average Electricity Price

Comparison By Australian State: Renewable Energy % Of Electricity Production vs Average Electricity Price

In this guide we compare, by each Australian State:

  • the renewable energy % of electricity production (what share renewables make up of electricity production)
  • average electricity price (retail price, in cents per kWh)

 

Summary – Why Compare These Stats For Australian States On Renewable Energy %, & Electricity Prices

  • Because people often want to know whether renewable energy % share of electricity production has an impact on electricity prices (whether it can help make them higher or lower)
  • It Australia’s case, renewables seem to be only one component of electricity prices. There seems to be many other perhaps more significant factors impacting electricity prices in several States. National energy policy, the cost for poles and wires, and the cost to generate electricity, all seem to be big factors – but the factors can vary State to State.

 

Renewable Energy % Of Electricity Production vs Average Electricity Prices In Each Australian State

Below is a list of the Australian States. What the list shows is:

  • First Line – Renewable Energy % Of Electricity Production in 2018
  • Second Line – Average Retail Electricity Price (Australian cents per kWh) in 2018 [note: as of August 2019, 50 AUD cents equals 34 USD cents]

The list is:

  • Tasmania – 96%, 25.90 AUD cents per kWh (mostly hydro power)
  • South Australia – 53%, 43.67 AUD cents per kWh
  • Victoria – 21%, 27.56 AUD cents per kWh
  • Western Australia – 16%, 28.33 AUD cents per kWh
  • NSW – 15%, 33.33 AUD cents per kWh
  • Queensland – 10%, 29.01 AUD cents per kWh
  • Northern Territory – unknown %, 25.67 AUD cents per kWh

– cleanenergycouncil.org.au, and gobulk.com.au

(the cleanenergycouncil.org.au’s 2019 report on page 45 outlines what makes up these prices – it’s mainly poles and wires, and the cost to generate electricity, with electricity company costs and environmental costs in third and fourth by a fair distance)

‘The Australian Competition and Consumer Commission’s (ACCC) review of the retail electricity market in Australia addressed what they called a broken National Electricity Market’ (cleanenergycouncil.org.au)

View the ACCC’s report (with recommendations to reduce Australian electricity prices) at https://www.accc.gov.au/media-release/accc-releases-blueprint-to-reduce-electricity-prices

We also put together a guide that outlines some potential solutions for fixing South Australia’s high electricity prices, and these solutions don’t just address renewable energy.

 

Additional Notes – What Does Air Pollution & CO2 Look Like In Australia, & By State? &, Why Does It Matter?

  • Electricity production is one of the key sectors that is linked to CO2 emissions along with the transport sector (both use fossil fuels), but also other sectors
  • If renewable energy can be linked to higher electricity prices in a particular State, they may want a guarantee that at least these higher prices are contributing to lower CO2 emissions from electricity and also lower air pollution levels (so there is at least an environmental benefit being received for the higher prices being paid)

NOTE: as mentioned above, it is not only the electricity sector that contributes to air pollution and greenhouse gas emissions. The burning of fossil fuels and activity in other sectors such as transport, heating and cooling, agriculture, industrial, residential, and more can contribute to them.

 

CO2 Emissions & The Electricity Sector In Australia

The electricity sector produces the most emissions in Australia, followed by stationary energy, and transport (theguardian.com)

 

Air Pollution By Australian State

  • ‘The air quality in Australia is generally considered ‘good’ by international standards … [and a] notable portion – approximately 75 percent – of air pollution is from motor vehicle emissions’
  • [and, in terms of annual mean PM10, all Australian major cities have lower air pollution than several notable major cities globally]

– allianz.com.au

Also note though – there are different sizes of particulate matter, along with other types of air pollution contaminants like ozone, nitrogen dioxide, etc. that can be measured.

 

Sources

1. https://www.cleanenergycouncil.org.au/resources/resources-hub/clean-energy-australia-report

2. https://gobulk.com.au/australian-electricity-prices/

3. https://www.canstarblue.com.au/electricity/electricity-costs-kwh/

4. https://www.theguardian.com/australia-news/2019/jul/09/australias-emissions-reach-the-highest-on-record-driven-by-electricity-sector

5. https://www.allianz.com.au/life-insurance/news/air-pollution-and-health

6. https://assets.cleanenergycouncil.org.au/documents/resources/reports/clean-energy-australia/clean-energy-australia-report-2019.pdf

7. https://www.accc.gov.au/media-release/accc-releases-blueprint-to-reduce-electricity-prices

8. https://www.bettermeetsreality.com/solutions-for-making-electricity-prices-cheaper-more-affordable-in-different-countries-states/

Electricity Prices In Countries That Use The Most & Least Renewable Energy For Electricity

Electricity Prices In Countries That Use The Most & Least Renewable Energy For Electricity

This is a very short guide listing notable countries, and their respective renewable energy as a % of electricity production, and average electricity prices.

This reason for putting this guide together is to see if there is some kind of link between renewable energy use for electricity, and electricity prices.

(Note: the energy sources used for electricity is just one factor that might impact prices – there are many general factors that can cause electricity prices to increase and decrease. The same can be said for electricity prices on a country and State specific level

 

In the below figures:

  • Electricity Prices = average electricity price as of 2019, in terms of US Dollars/cents, per kWh (kilowatt hour) of electricity. Prices are obtained from globalpetrolprices.com, but also wikipedia where otherwise stated. Additional prices can also be seen at wikipedia.org
  • Renewable Energy % = renewables as a % of total electricity generation in a given year (most of the stats are from 2016). %’s are obtained from wikipedia.org

As a benchmark, note that the average electricity price globally in March 2019 was 0.14 U.S. Dollar [14 US cents] per kWh (globalpetrolprices.com)

Also note that we have listed every country, but some of the most notable ones. %’s and prices for other countries can always be viewed by following through the links in the resources list.

 

Electricity Prices In Countries That Use High %’s Of Renewable Energy For Electricity (50% Or Higher)

  • Iceland – 100%, 16 (US) cents
  • Norway – 97.2%, 14 cents
  • New Zealand – 83.9%, 21 cents
  • Brazil – 80.4%, 18 cents
  • Austria – 74.3%, 22 cents
  • Nepal – 65.5%, 8 cents
  • Canada – 65%, 11 cents
  • Denmark – 60.5%, 34 cents
  • Switzerland – 59.8%, 21 cents
  • Sweden – 57.1%, 20 cents

 

Electricity Prices In Countries That Use Medium %’s Of Renewable Energy For Electricity (20% To 49%)

  • Finland – 44.2%, 19 cents
  • Spain – 38.1%, 25 cents
  • Italy – 37.3%, 26 cents
  • Turkey – 32.9%, 10 cents
  • Pakistan – 32.7%, 5 cents
  • Germany – 29%, 35 cents
  • United Kingdom – 27.9%, 
  • Ireland – 24.7%, 23 cents
  • China – 24.5%, 8 cents
  • Argentina – 21.5%, 9 cents

 

Electricity Prices In Countries That Use Low %’s Of Renewable Energy For Electricity (20% Or Lower)

  • France – 17.5%, 19 cents
  • Russia – 16.9%, 6 cents
  • India – 16.88%, 8 cents
  • Belgium – 16.6%, 32 cents
  • Mexico – 15.3%, 8 cents
  • Japan – 15%, 29 cents
  • United States – 14.7%, 14 cents
  • Australia – 14.5%, 25 cents
  • Poland – 13.7%, 17 cents
  • Hungary – 10.1%, 13 cents
  • Egypt – 8.2%, 3 cents
  • Ukraine – 5.6%, 5 cents
  • South Korea – 2.8%, 10 cents
  • United Arab Emirates – 8 cents

 

It’s Also Worth Knowing The Electricity Prices & Renewable Energy % In A Country By The Individual States …

Like in the United States for example – where %’s and prices differ from State to State.

We have put together a guide that lists the retail electricity prices and renewable energy % of electricity production by the individual US States.

Knowing both the National and State electricity sector stats paints a broader and more accurate picture.

 

Sources

1. https://www.globalpetrolprices.com/Democratic-Republic-of-the-Congo/electricity_prices/

2. https://en.wikipedia.org/wiki/Electricity_pricing

3. https://en.wikipedia.org/wiki/List_of_countries_by_electricity_production_from_renewable_sources

4. https://www.bettermeetsreality.com/comparison-by-us-state-renewable-energy-of-electricity-production-vs-average-electricity-price-vs-co2-emissions-vs-air-pollution/

5. https://www.bettermeetsreality.com/factors-that-impact-electricity-prices-what-causes-them-to-increase-decrease/

6. https://www.bettermeetsreality.com/causes-of-high-or-increased-electricity-prices-in-different-countries-states-around-the-world-case-studies-examples/

Solutions For Making Electricity Prices Cheaper & More Affordable In Different Countries & States

Solutions For Making Electricity Prices Cheaper & More Affordable In Different Countries & States

In this guide, we explore potential solutions for making electricity prices cheaper and more affordable in different countries and States around the world.

We are not claiming to have the exact answers, because ultimately, the electricity sector has a lot of moving parts, is complex, and has both short term and long term interests and priorities that need to be balanced by multiple parties (government, suppliers, retailers, and so on).

What we’ve done instead is used this guide as a starting point for discussions on general solutions, and country and State specific solutions.

 

First, Understand Average Electricity Prices In Each Country & State

Before trying to come up with solutions for making electricity prices more affordable, it makes sense to first get an idea about where each country’s electricity prices fit in compared to the global average or compared to other countries.

Going a level deeper than that, electricity prices are generally State specific (because of factors like national and State governments), so you’ll want to also get a gauge of average State electricity prices. As an example, this guide outlines by each US State, the average electricity price, and also the % of electricity provided by renewable energy.

 

Second, Understand The General Factors That Impact Electricity Prices, & Country/State Specific Factors 

There are many general factors that can cause electricity prices to increase and decrease.

There are also factors specific to a certain country or State that impact electricity prices.

Be aware of both, and do a country or State specific analysis to gather all the variables and unique factors that could be impacting upon a particular country or State. This guide about how to determine what is causing electricity prices to rise or fall might be helpful.

A consideration that may be taken into account is that higher electricity prices aren’t always a bad thing if there is a benefit or multiple benefits such as a higher quality electricity service, or environmental and social short and long term benefits. But, these benefits must be clear, and must be weight up against the price or volatility of prices.

 

Third, Look At General Solutions For Making Electricity Prices More Affordable

Some of these more general solutions might include:

 

  • Supply & Demand

Total supply and demand of electricity, and the timing of supply and demand on a daily or seasonal basis. When supply is lacking and demand is high, prices are going to be pushed up, and vice versa.

Ideally, prices would stay more consistent and not be too volatile. Trying to balance the total supply and demand, and timing of supply and demand (during a particular day or during each season), are critical to any energy grid in terms of prices. Solar and wind for example can be variable sources of energy that can lead to a surplus, or a lack of power at any one time. 

So, getting the energy mix and energy sources right can be important in terms of how electricity is sourced and actually provided as a service on a commercial/utility level. But, this is only one factor – supply and demand can be directly and indirectly impacted by many factors.

 

  • Cost Of Electricity Generation

Some sources of electricity generation are far cheaper than others. Ideally, we would want to max out the low cost sources of electricity generation first – but, at some point, they reach their maximum potential.

Also, some sources of electricity generation can have negative short and long term effects (air pollution and greenhouse gas emissions from fossil fuels are well documented). So, this is an additional consideration for cheap energy sources.

The mix of electricity generation sources in an energy system should look to keep costs as low as possible while also meeting other environmental and social targets.

Solar and wind may have minimal operational costs and be getting cheaper and cheaper from a capital perspective, but they may also need additional energy sources to complement them (more consistent and reliable energy sources), or energy storage like pumped hydro, or battery storage. These extras can be expensive, or just be expensive to deliver electricity as a service (on top of the actual cost of capital and operation of an energy source). So, we have to look at the cost of the service of providing electricity, and not just the cost of an individual energy source exclusive of the whole energy grid and delivery of electricity from energy source to consumer.

 

  • Investment In Networks & Electricity Infrastructure

Transmission poles and wires, and other network infrastructure needs to be replaced, maintained, built new, and upgraded. This isn’t cheap, and costs can be passed onto consumers.

Ideally, we would look to be as efficient as possible with building new and upgrading infrastructure. 

Also, we would look to get as accurate a picture as possible on future electricity demand so we aren’t building more infrastructure than we need (and spending more money than we need).

Careful planning, design and construction of infrastructure is important.

 

  • Government Policy, Energy Standards & Portfolios, Regulation, Taxes, Subsidies, Support Schemes, Etc.

There are many things governments can do to regulate, control, influence or support certain parts of the electricity sector.

Policies, energy standards in portfolios, regulation, taxes, subsidies, and support schemes should look to balance short and long term goals, without eliminating competition and a free market. 

For example, although green energy can be important for different reasons, ideally government intervention in the market isn’t so abrupt and extreme that we eliminate low cost nuclear and fossil fuels, or restrict supply of these cheap sources of electricity. Gradual transition to new energy sources and ‘smoothing’ the market might be more desirable so electricity prices don’t jump so quickly and stay at a high level.

Government intervention and support vs the free market can be a tricky balancing act overall.

 

  • Complementary Relationship Between National, State, Local & Various Tiers Of Government 

There are different levels and tiers of government – local, State and national.

Ideally, energy and electricity policies between the different tiers of government should complement each other in the short and long term, but this is not always the case. 

 

  • Return Of Investment Of Utilities & Suppliers, & Profit For Retailers

Utilities and suppliers may want a return on their investment.

Retailers may want to profit off their sale to consumers of electricity.

These things are encouraged in a free market, and rightly so.

But, in a sector as important as electricity, there should ideally be some transparency or sustainability around how this happens.

 

  • The Health Of The Economy 

The health of the economy impacts investment in new power plants and energy infrastructure, demand, supply, and other factors. Strong economic policy from the national and State governments can help keep the economy healthy, and as a result, keep competition strong in the electricity sector 

 

  • Importing & Exporting Of Electricity, & Independence Of Supply

The balance between importing and exporting electricity can impact a country or State’s electricity supplies.

They may have to pay to export surplus electricity, or pay to import expensive electricity where they lack supply themselves. They can also be vulnerable to cost variations when they rely on another country or State to fulfill their demand for electricity.

So, getting this balance right can be important.

 

  • Local Weather Patterns

Amount of and directness or intensity of sun impacts solar. Wind conditions impact wind energy. Rainfall can impact hydro energy (for rivers and storage reservoirs).

 

Fourth, Look At Country Or State Specific Solutions For Making Electricity Prices More Affordable

Each country and State is going to need solutions of their own (based on their own set of variables and factors impacting electricity prices) to make electricity prices more affordable.

Just a few starting points might be:

 

In places like Denmark, Germany, Belgium, and other places impacted by renewable and green energy taxes:

  • with more [of a country’s] energy coming from renewable sources, there is no need for the tax on electricity to remain at such a high level
  • … the high electricity tax no longer supports the green change, and at the same time it is both expensive to consumers and a burden on the economy,
  • Therefore, it is only sensible to lower the tax significantly
  • [it has been] suggested that revenues lost from an electricity tax cut would be offset because economic growth would increase the overall tax take

– tax-news.com

 

California also seems to have had it’s renewable energy sources have a large part to do with increased electricity prices. They might look at similar solutions to Denmark and other European countries, but, more competition and supply from lower cost energy sources may also help (some say that the previous shut down of nuclear plants meant more affordable sources of electricity also went with them).

 

Somewhere like South Australia (and Australia as a whole), some of the potential solution won’t just focus on renewable and green energy taxes, but a whole range of factors:

  • Gas prices could be cut by having more gas could be injected into the domestic market, whether through limiting the amount that can be exported or carving out part of what is produced for local use only.
  • Also, the States could open up gas companies for more exploration and development to make it more available (increase supply). This would take years to flow through even if they were to relent.
  • Also, there could be energy and climate policy to encourage investment in new power plants.
  • For clean energy – Increased generation capacity will help cut the soaring wholesale price, offsetting the cost of the target itself
  • This will go only so far though – eventually more old coal-fired plants will shut. … policy certainty beyond 2020 is needed to spark further investment in replacement plants and energy storage to provide reliability, limit price rises and help Australia meet its climate targets.
  • There are other factors at play that make predicting the future difficult. To take one example: a significant chunk of what consumers are charged is to ensure the grid can deliver at peak times. The exponential rise of solar panels – now on more than 1.7 million homes – combined with the expected growth in home battery packs is expected to reduce this. So is the introduction of demand response programs, which offer a cash incentive to businesses and consumers who make themselves available to briefly turn off the power at times of stress on the grid (usually in periods of extended extreme heat).
  • Both home generation and demand response should limit the need to invest in expensive new plants and networks. They make projections of future electricity demand – which has already levelled off over the past decade – difficult. The same applies to costs.

– arena.gov.au

 

The ACCC released a blueprint to reduce Australian electricity prices (with 56 recommendations), which can be viewed at:

  • https://www.accc.gov.au/media-release/accc-releases-blueprint-to-reduce-electricity-prices

But, as noted on page 44 of a cleanenergycouncil.org.au 2019 report, the Australian government chose to pursue only several of these recommendations.

 

  • [a State like Vermont in the US might take advantage of cheap energy sources like natural gas in order to lower electricity prices]

– burlingtonfreepress.com

 

Fifth, Understand Potential Limitations In Changing Electricity Prices

There can be short term and long term limitations to changing electricity prices. 

Some of these can be:

  • Lag on results from the implementation of government policy – policy can take years to show effect in the market
  • Stranded investment in current power plants and infrastructure – countries like China currently have a lot of money invested in current energy sources and infrastructure, which can impede the uptake of new energy sources
  • It takes time to build new power plants and infrastructure – it needs to be planned, designed, approved and built (have to allow for construction times)
  • Politics – more affordable options for electricity may exist, but may not be actioned because of politics, conflicts of interest, bias, or other reasons
  • Lack of natural resources or other resources – lack of natural resources in a particular State or country can prevent them from expanding electricity generation from a particular energy source
  • Remote areas and islands – remote areas and islands have in built limitations which can prevent them from having cheap electricity. Alaska, Hawaii and the Solomon Islands are a few examples
  • Quality of electricity service – the higher the electricity service (and the more reliable it is), the higher the price for this service usually
  • Environmental and social benefits – people sometimes forget that increased cost for electricity isn’t always bad. There can be environmental and social benefits in switching to a new electricity setup that is more expensive. In this instance though, obviously the benefits should be clearly provable and clearly worth the extra price of the electricity service

 

Sources

1. https://www.bettermeetsreality.com/factors-that-impact-electricity-prices-what-causes-them-to-increase-decrease/

2. https://www.bettermeetsreality.com/countries-with-the-most-expensive-cheapest-electricity-prices-electricity-prices-around-the-world/

3. https://www.bettermeetsreality.com/comparison-by-us-state-renewable-energy-of-electricity-production-vs-average-electricity-price-vs-co2-emissions-vs-air-pollution/

4. https://www.bettermeetsreality.com/causes-of-high-or-increased-electricity-prices-in-different-countries-states-around-the-world-case-studies-examples/

5. https://www.bettermeetsreality.com/how-to-determine-what-is-causing-electricity-prices-to-increase-decrease-in-specific-countries-states-a-step-by-step-guide/

6. https://arena.gov.au/blog/energy-prices/

7. https://www.tax-news.com/news/Denmark_May_Reduce_Electricity_Tax_Significantly____76736.html

8. https://www.burlingtonfreepress.com/story/money/2018/02/07/why-vermonters-should-keep-eye-electricity-costs/314637002/

9. https://assets.cleanenergycouncil.org.au/documents/resources/reports/clean-energy-australia/clean-energy-australia-report-2019.pdf