Electricity Prices Expected to Surge Under Republican Budget

(continued from #6 because of the 4k character limit ...)

Low-Energy Fridays: If renewable energy is cheaper, then why don't we use it exclusively?
www.rstreet.org

... The fundamental assertion behind many climate protests and activism is that decision-makers do not do enough. Often, the specific claim is that an apparent solution"transitioning to 100 percent renewable energy"is being sidelined or that decision-makers are under the influence of fossil fuel lobbyists.

As is often the case, this isn't the full story. An appreciation for the economic impacts of time and location can help us understand why renewable energy is not the global norm despite its low cost.

Yes, renewable energy is cheaper than fossil fuels"but there are caveats. The levelized cost of electricity (LCOE), the lifetime average per megawatt hour cost, is $23.22 for conventional solar power and $31.07 for onshore wind. (To be clear, these are the subsidized costs; the unsubsidized costs are $41.22 and $50.87 respectively.) Natural gas and coal plants, categorized as "thermal plants" because they produce electricity from heat, have a higher LCOE. Natural gas has a relatively low LCOE of $42.72, while coal's is much higher at $89.33. When comparing the LCOE of these technologies, simplistic analysis would conclude that because renewable energy is cheaper, everyone should use it. Such logic informs increasingly prevalent clean electricity mandates. However, the LCOE ignores basic economic realities that can better determine which energy resources are optimal.

The cheapest renewable energy sources"onshore wind and conventional solar"are not always available. Obviously, solar power only generates electricity when the sun is out. But when the sun is out, solar always produces essentially free electricity, whereas a gas or coal plant can generally produce power at any time but incurs a fuel cost.

The problem is that we still need electricity even when the sun isn't shining. In fact, the capacity factor"the percentage of a resource's production as a function of its size"is only 23 percent for solar and 33 percent for wind. In general, as long as fuel is available, thermal power plants can produce electricity to match demand throughout the year even if some plants aren't called on often.

This means to act as a direct substitute for fossil fuels; renewable energy requires storage technology to make electricity available when customers demand it, not just when it's convenient to produce. Battery storage costs are falling but still expensive relative to other options, and applications are limited depending on how long a battery can provide electricity before needing to recharge. The U.S. Energy Information Administration (EIA) estimates an LCOE of $36.27 for solar and battery hybrid facilities. ...

OK, probably not the most unbiased source (understatement), but you should see the picture ...

When clouds occur or the winds diminish, there is a need for backup power, a.k.a. batteries.

On an industrial scale, you need fossil fuel generators for backup. You don't need to run them all the time, but they need to be available with the wind/solar arrays can't meet demand. Alberta does this.

@#8 ... On an industrial scale, you need fossil fuel generators for backup. ...

Agreed, 100%.

But then there is also the issue that the current power grid may not go to the places where solar power is generated.

The current power grid was designed for the current power plants, not future power-generating areas.

And then, throw in the huge power needs of AI data centers.

Meta is building AI data centers in tents and isn't slowing down -- Zuckerberg reveals plans for 'several multi-GW clusters,' including one called Hyperion that's almost as big as Manhattan
www.tomshardware.com

And, fwiw, GW in the above headline means gigawatts.

Where is that power going to originate?

Six big ideas to help avoid a U.S. electricity crisis (April 2025)
news.stanford.edu

... Energy leaders recently gathered at Stanford to discuss ways to quickly expand the U.S. electricity supply and infrastructure to meet growing demand. A new report summarizes their key ideas for policymakers. ...

It's so cheap to burn fossil fuels there's not much market incentive to improve and invent technology to store the notoriously not-available-all-the-time -- because unlike humans they are connected to the rhythms of life and as such won't ever naturally produce a 24x7 McDonalds -- green energy sources of hydro and wind and solar. Only geothermal is always there but you can't replace Three Mile Island with it.

Carbon tax is the easiest policy fix. When we monetize it, we have invented all kinds of tools that work very effectively to maximize value for the money.

But then there is also the issue that the current power grid may not go to the places where solar power is generated.

Certainly. That infrastructure needs to be updated. Power in Canada is (historically) mostly hydroelectric and nuclear. Prairie provinces like Alberta and Saskatchewan have been replacing coal and oil fired plants with wind and solar using the same grids, but converting the old plants to natural gas for backups. There are a lot of infrastructure upgrades in the works to connect the wind/solar inputs to the "Grid". I'm a bit on the fence about solar, but wind certainly generates a lot of power when there is, well, wind.

@#11 ... It's so cheap to burn fossil fuels ...

But, is that only because the whole power-generating infrastructure has been designed, built and optimized for that purpose for decades?

OK, let's imagine a different scenario, where solar and wind power are the entrenched power generating technologies.

And this new upstart, called fossil fuels, appears.

How might that have transpired?

That already did transpire when steam overtook sail on the seas.

@#14 ... That already did transpire when steam overtook sail on the seas. ...

But what about the power grid?

That's the nub of the question I am trying to get to ...

Does the current power grid have the necessary capacity to channel the power generated by solar energy into the power the power grid that serves all of the United States (less Texas, btw).

The current answer is a resounding "no."

The current power grid was set up for sources like Three Mile Island.

(and I do note that Microsoft is working to fire up Three Mile Island once again)

Three Mile Island nuclear plant will reopen to power Microsoft data centers (September 2024)
www.npr.org

@#12 ... Certainly. That infrastructure needs to be updated. ...

But, who pays for that update of the infrastructure?

The Great Grid Upgrade
www.nationalgrid.com

...

The Great Grid Upgrade is the largest overhaul of the electricity grid in generations, connecting more clean, secure energy to power the things we love.

Here you'll find answers to some of the most frequently asked questions about The Great Grid Upgrade.

Your questions about the upgrades

Why does the country's electricity grid need to be upgraded? ...

But that site seems to be the UK ...

But, imo, same problem.

But, who pays for that update of the infrastructure?

Ultimately, I'd guess the end users, unless they use a LOT. If they use a LOT, then other end users.

@#16 ... Ultimately, I'd guess the end users, unless they use a LOT. If they use a LOT, then other end users. ..

Yeah, that's what I have been seeing.

The power companies trying to saddle home electric consumers with the cost of providing power to power-hungry AI data centers in their local towns.

Who's really paying AI's power bill? (April 2025)
www.latitudemedia.com

... As data centers push load growth to historic levels, new research reveals how utilities and developers are inking secret deals. ...

This week, Ari Peskoe, Director of the Electricity Law Initiative at Harvard Law School, joins us to talk about the new report he co-authored, "How utility customers are paying for Big Tech's power."

This hidden cost transfer is just one front in a broader battle over energy regulation. At the federal level, the White House is making an unprecedented grab for control over FERC, the independent commission governing interstate energy markets.

Meanwhile, another executive order gives the Department of Energy extraordinary authority to force struggling coal plants to stay open regardless of economics -- creating what critics describe as a consumer-funded bailout for uneconomic generation. ...