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 ...
