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This Is How Fossil Fuels Die

Some recent stories from, of all places, Texas, offer the first clear glimpse of the coming energy revolution. The short version: Combine wind at night, solar during the day, and next-generation batteries, and you get an energy economy that doesn’t need oil, coal, or gas.

Wind power is so cheap at night in Texas, some companies give it away

(Grist) – In Texas, you could have a full-out appliance party at your house — with the dishwasher whirring, oven broiling, and laundry spinning — and as long as it’s after 9 p.m. and you’re on the right electricity plan, the extra energy use won’t cost you a thing.

More than 50 Texas utility companies are offering plans that give away free electricity at night, thanks to bountiful wind power, among other factors. The New York Times explains:

… Texas has more wind power than any other state, accounting for roughly 10 percent of the state’s generation. Alone among the 48 contiguous states, Texas runs its own electricity grid that barely connects to the rest of the country, so the abundance of nightly wind power generated here must be consumed here.

Wind blows most strongly at night and the power it produces is inexpensive because of its abundance and federal tax breaks. A shift of power use away from the peak daytime periods means lower wholesale prices, and the possibility of avoiding the costly option of building more power plants.

Companies in other states have dabbled with incentivizing electricity use during off-peak hours, but the Lone Star State is unmatched in this huge energy experiment. And it makes sense: After all, there was that one September night in Texas when the price of electricity dropped below zero — meaning that the state’s power producers actually paid to have energy taken off their hands.

You might not have expected the historically oil-obsessed Texas to be a pioneer in alternative energy plans. But environmental concerns aren’t the driving factor behind this free nighttime electricity. Instead, it was spurred on by tough competition in a deregulated energy market. According to the New York Times, utility company executives readily admitted that these plans are “overwhelmingly a marketing tool.”


World’s Cheapest Solar Power Lands In Austin, Texas — Under 4¢/kWh! (Sort Of)

(Cleantechnica) – Texans likes to be #1. Well, a lot of people like to be #1, but Texans are particularly known for this. For the time being, the Lone Star State can now lay claim to being #1 again with the cheapest solar power on the planet.

Not long ago, Dubai grabbed the title with a bid for a large solar project coming in under 6¢/kWh. As that article explains, that 5.98¢/kWh bid (now actually down to 5.84¢/kWh) shattered the previous record for the world’s cheapest solar power (or the world’s lowest solar power bid, since there is a slight difference). That article also noted that the second-lowest bid would have taken the record if the lowest hadn’t existed, showing that it wasn’t just a crazy anomaly from one developer. The Dubai solar bids were very exciting, and the talk of the industry for months, but records don’t last very long in the world of solar these days.

Austin Energy, the city of Austin’s utility, recently put out data on solar project bids for the utility’s 600 MW procurement plan. To show how competitive this landscape is, Khalil Shalabi, Austin Energy’s vice president of resource planning, noted that 7,976 MW worth of solar projects were bid in April in competition for this 600 MW.

But that only partly shows how competitive things have gotten. 1,295 MW of those solar project bids came in below 4¢/kWh! (Talk about shattering records.)

There is a difference between these bids and the Dubai one, of course — there are no subsidies for solar in Dubai, while these Texas solar projects can take advantage of the US federal tax credit for solar. But even accounting for the 30% tax credit, these projects would come in below 6¢/kWh (below 5.71¢/kWh, in fact). In other words, these do indeed represent the lowest solar power bids we’ve seen worldwide.

Update: For context, note that no other source of electricity production other than wind has a levelized cost of electricity (LCOE) below 5.71¢/kWh, or even below 6¢/kWh. Furthermore, solar power was projected to hit a low of 6¢/kWh in 2017.



The costs of solar and onshore wind will continue their swift descents

(British Petroleum) – The cost of onshore wind power will fall by 14 per cent with every doubling of cumulative installed capacity, while the cost of solar will drop by 24 per cent with every doubling, according to BP predictions. This is thanks to the litany of small components that make up renewable energy systems declining in cost much faster than larger, more capital-intensive modules such as nuclear reactors.

Between 2030 and 2040 BP predicts solar will break through the 30 per cent efficiency rate. Advances in offshore wind farms will include design technologies to support taller towers, the development of new materials for larger blades, and better sensors to allow for aerodynamic control throughout the blade length.

Assuming that all of the the above is correct — especially about the continued decline in the cost of solar and wind — the question becomes not if they’ll displace fossil fuels, but when. A system as extensive and entrenched as today’s energy market can’t change overnight. Tesla, the leading electric car maker, will deliver 55,000 cars next year in a world where tens of millions of new vehicles are produced annually. Solar and wind, despite pockets of dominance, account for less than 5% of global energy production. So this revolution is in its infancy. The BP study referenced above expects the transition to take many decades.

But we’ve seen some other revolutions lately, and they imply that when a technology’s day arrives, its path to dominance can be shorter than most expect. Digital cameras, for instance, were a novelty 20 years ago and now own the photography market. Smart phones were toys of the rich in the mid-2000s and are now ubiquitous.

Let the cost of solar and wind have another ten years like the last ten and no one with a middle class income will even consider a gasoline-powered vehicle or a house lacking solar panels on the roof and batteries in the basement.

Obligatory gloom-and-doom note: The rise of alt-energy is exciting on many levels, from pollution to decentralization to geopolitics. But it won’t change the fact that the developed world is heading off a financial cliff. A good analogy is the 1930s, when auto sales boomed while the global economy was mired in Depression. So solar, wind and electric car stocks might or might not be great investments, depending on which trends the markets choose to focus on.

10 thoughts on "This Is How Fossil Fuels Die"

  1. The charm
    of electricity is that you switch it on when you need it and switch it off when
    you don’t. Electricity generation has to complement this usage pattern. That’s
    why we have a mix of generating systems. Steam-based nuclear, coal, oil for
    permanent and predictable cyclical usage and easy switch-on/off turbine-based
    gas, water for spikes. Wind and solar are erratic in most parts of the world,
    so you need backup capacity.
    Electricity prizes in Denmark and Germany are
    going thru the roof because of this technical limitations of heavily subsidized
    wind/solar. The erratic dirt-power of wind/solar is pushing prices down on
    sunny and windy days. The calculable-power producers switch there red-ink
    capacity off. The grid becomes unstable. Politics enforces subsidizing of
    calculable-power producers and expanding the grid for wind/solar supply shocks. You end up with double capacity : Calcuables and erratics, each 100%,
    Result: households pay 27 to 30 euro cents per kwh.

    Consider a pizza service that offers you
    pizzas at dirt cheap prizes but only when they like say 3.a.m. or just after
    you had dinner. Will you rise in the night for a $2 pizza? Cheap is no argument
    when there’s is no demand.

    The bottleneck are the batteries or more
    general electricity-storage. Not enough capacity per weight and dollar. If we
    see a breakthrough there, then wind/solar makes much more sense. Up to that
    moment don’t listen to the sirens of the wind/solar snake oil salesman.

  2. Don’t hold your breath waiting for fossil fuels to die out. Fossil fuels are much more efficient than wind and solar energy. Wind energy with its big noisy windmills will never be any more than a small niche market. Notice how the greenies who never miss a chance to show photos of birds harmed by the occasional rare oil spill never show any photos of the hundreds of birds killed by windmills year in an year out.

    Solar energy is better than wind but still highly inefficient compared to fossil and nuclear energy. It will be many years before solar panels can replace fossil fuels, and maybe they never will completely. Let me see an airplane that flies with a battery charged by solar energy. Much smaller electric cars aren’t even close to doing what a regular car can do even if you are as rich as Arnold Schwarzenegger and can afford to buy an electric car. Maybe in another 30 years electric cars will be as affordable and efficient as regular cars. Like I said, don’t hold your breath.

    The smart way to go is nuclear energy which is incredibly efficient. The strange irony is that the greenies who hate fossil fuels and want only wind and solar are afraid of nuclear energy because when they were kids in the late 1970s they saw the science fiction movie “The China Syndrome” about an accident in a nuclear power plant. The greenies are like the19th Century Luddites; they are afraid of high tech like nuclear energy because they don’t understand it.

    A modern industrialized culture with a high standard of living like we have in the USA needs massive amounts of energy. Wind and solar power alone will likely never create enough energy to sustain that high standard of living. With nuclear power we could have unlimited energy and maintain our high standard of living.

    If the greenies win out and block the future use of fossil fuels and future development of nuclear energy then our standard living will decline substantially. What a pity it would be if the rich Hollywood greenies had to ride a bicycle to their anti-fossil fuel rallies instead of taking their usual gas guzzling private jet or limousine.

    1. I am not a greenie but the thought of an extinction event terrifies me.
      I actually do support nuclear energy, particular 4th Gen designs like LFTRs; we should be heavily investing in these things.
      There are also a lot of promising new angles for materials which will provide much more efficient/cheaper solar and storage options (e.g., graphene) and materials which superconduct at room temperature (transmission).
      I don’t hate fossil fuels, actually I think oil is too valuable a material to burn up.

      The problem with climate change is the potential for positive feed-backs, and the fact that all kinds of conservative estimates (like those of the IPCC) keep being overtaken by actual developments. A lot of the conservative backlash (only in Anglo-Saxon countries) is fueled by ignorance of the actual science and politically informed gut-reactions.

      1. Don’t be afraid of an ELE. The wonderful thing about them is that there isn’t anyone around to worry about it.

  3. Petroleum use climbs pretty much every year. ‘Rich countries’ can ‘invest’ in renewables while poor countries have plenty of citizens happy to buy a powered scooter.

    The Trent in renewables will continue. So will the trend in petroleum usage. The difference in the mix will be who are the end users.

  4. Renewables are BS. It takes a lot of fossil fuel to mine the ore, process the ore, deliver the ore, build the product, build a delivery system, maintain the delivery system and the list goes on. Renewables are pushed by people capitalizing on an agenda, scared shitless as they look at the future/grasping at straws, getting a buck from the government, selling shares and that list, as well, goes on. The economy we’ve created is unsustainable so adjust to a dramatic downsizing filled with ever more chaos/war, climate disasters, ever increasing cost just to maintain what we have and that list goes on. And to top it all off, we’re reproducing like rabbits. Course, as usual, it ain’t us that’s the problem. It’s somebody else. Glummy? Yep!

    1. The rapid development in solar technology is comparable to the development of computer and communications technologies. Solar is already viable and will become dominant power generation technology in the near future. With the rapid development in battery technology, going off grid will be good for the masses. Electric cars will be competitive and it is a better technology as the engine is simpler. Less energy will be lost as the braking process will send power back to the battery.

  5. This is rubbish.

    Without subsidies ‘renewable’ energy would not exist.

    And it is not renewable — because solar panels and windmills do not grow on trees.

    Blues for the Greenies: Now matter how many greenbacks the government throws at “green” energy, everyone ends up feeling blue. Yesterday the Wall Street Journal
    updated the story we’ve been covering for a long time now about the dismal
    performance of the Brightsource solar energy array in the California

    Replacement of oil by alternative sources

    While oil has many other important uses (lubrication, plastics, roadways, roofing) this section considers only its use as an energy source. The CMO is a powerful means of understanding the difficulty of replacing oil energy by other sources. SRI International
    chemist Ripudaman Malhotra, working with Crane and colleague Ed Kinderman, used
    it to describe the looming energy crisis in sobering terms.[13] Malhotra illustrates the problem of producing one CMO energy that we currently derive from oil each year from five different alternative sources. Installing capacity to produce 1 CMO per year requires long and significant development.

    Allowing fifty years to develop the requisite capacity, 1 CMO of energy per year could be produced by any one of these developments:

    4 Three Gorges Dams,[14] developed each year for 50 years, or

    52 nuclear power plants,[15] developed each year for 50 years, or

    104 coal-fired power plants,[16] developed each year for 50 years, or

    32,850 wind turbines,[17][18] developed each year for 50 years, or

    91,250,000 rooftop solar photovoltaic panels[19] developed each year for 50 years


    1. Rubbish indeed! Estimates of global subsidies/tax breaks to the fossil fuel industry amount to $600 billion per year (by the International Energy Agency IEA). For renewables that figure is $Bn 120. This does not include the costs imposed on the public health (pollution) or governments (clean ups).

      The true subsidy to the fossil fuel industry (including external costs to the public and government as well as current damages attributable to climate change) have been estimated at around $Tr 6. For comparison, the world spends about $Tr 6.5 on health care and about $Tr 1.7 on military.

      Replacing 1 CMO of energy is indeed a daunting challenge. But the future of humanity depends on it. Besides, oil is too valuable a resource for manufacturing to squander by burning it.

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