Game changer: Cheap renewables are causing rethink on markets | RenewEconomy

Game changer: Cheap renewables are causing rethink on markets

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Fossil fuels once had little to fear from renewable energy, but that’s no longer the case.

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This is the first of five installments in a series about clean energy.

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Inthe spring of 2009, Mark Parkinson, then governor of Kansas, was considering a request from Sunflower Electric to build a new coal-fired generator in Holcomb, a small town in the western half of the state.

Parkinson, eager to draw more wind developers to Kansas, said he would authorize the project if Sunflower backed a plan to source 20 percent of the state’s electricity from renewables by 2020.

From the outset, it sounded like a fair bargain. Sunflower would get its coal plant, and Parkinson could begin the slow, arduous and costly work of revamping the state’s electric grid.

Then, something unexpected happened.

Over the next few years, the cost of renewable energy plummeted. Kansas blew past its renewable energy target and now generates 30 percent of its electricity from wind.

And the Sunflower coal plant? It has yet to be built.High costs and legal challenges have kept the project in limbo.

Wind and solar are now cheap enough to compete with coal and gas across much of the country — even without subsidies.

Fossil fuels once had little to fear from renewable energy, but that’s no longer the case. Last year, wind and solar made up two-thirds of new U.S. generating capacity.

Today, wind technician and solar installer rank among the fastest-growing jobs in the United States.

But, falling costs and soaring popularity won’t be enough to sustain renewables. Clean energy has reached an inflection point. It threatens to upend the status quo, and entrenched interests are fighting back.

The rise of wind and solar threaten to eat away at oil and gas profits. New rooftop solar installations are cutting into the core business of power utilities by allowing homeowners to generate their own electricity. And new wind farms are transforming landscapes, sparking backlash from environmentalists.

nexus media interactive map
Click here to access interactive map. Lawmakers and regulators in a number of states are crafting policies to stymie the growth of renewable energy

Where wind and solar have made inroads, energy companies, power utilities and conservationists have pushed legislators to pass onerous, byzantine policies that make it all but impossible for renewables to compete with conventional power plants.

These measures are having a tangible impact on regular people. Ohio severely restricted wind development, depriving schools of tax revenue from nearby wind farms. Indiana slashed incentives for rooftop solar, dealing a blow to homeowners and installers.

Policymakers across the country are pushing measures to stifle renewable energy, and an unlikely assortment of consumer advocates and business leaders is fighting back.

The fight over clean energy is no longer a conflict between left-leaning climate hawks and laissez-faire libertarians.

These battles are pitting mainstream Republicans against Tea Party conservatives and environmentalists against each other.

Wind and solar have scrambled ideological loyalties, forcing Americans on both sides of the aisle to rethink their definition of the “free market” and reconsider what it means to serve the public interest.

Read the rest of this series from Nexus Media.

Source: NexusMedia. Reproduced with permission.

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  1. Radbug 3 years ago

    Sounds like the man walking with the flag in front of the car.

  2. sbean 3 years ago

    “The rise of wind and solar threaten to eat away at oil and gas profits.”

    They might have a slight affect — that is, measurable, but just barely — on profits from natural gas, but virtually zero impact on oil profits. What other whoppers will the author provide in the rest of this series?

    • Steven Gannon 3 years ago

      EV’s will soon start impacting on oil prices.

      • sbean 3 years ago

        How soon and how much? What percentage of the national private vehicle fleet do you imagine EVs will make up at the point that they “start impacting on oil prices”? One percent? Five percent? Oil prices have had massive ups and downs over the past decade that, and that will continue regardless of EV adoption. Oil is a commodity and is therefore subject to financial (i.e., speculative social mood) effects, not supply and demand.

        • neroden 3 years ago

          In the short term, commodities prices are speculative. In the long term, they respond to supply and demand.

          Oil used to have extremely inelastic demand. The demand would remain about the same when the price went up down.

          *Oil demand has gone elastic*. When the price rises, people switch to electric cars.

          Electric cars are selling as fast as they can be manufactured. This is partly because the largest, least efficient electric car is cheaper to operate than the average gasoline car at prices above US$1/gallon (US$6/bbl), and cheaper than the most efficient hybrid at prices above US $2/gallon ($47/bbl). Electric cars are already impacting oil prices, subtly. Wondered why oil can’t get over $50/bbl any more?

          (Footnote: this is less true in Australia due to your messed-up electricity market which generates stupidly high electricity price. Once there are enough solar panels and wind farms in place, however, bringing electricity prices back down to world norms, it will also be true in Australia.)

          Meanwhile, nobody can drill new wells cheaper than about $30/bbl and most can’t drill cheaper than $40/bbl.

          So I have a pretty solid projection for when electric vehicles cause a permanent collapse in the price of oil. Roughly 2023. The key to this is the arrival of electric semis, which are even more of a cost savings for their operators than electric automobiles. Without that, it takes until 2030.

          • sbean 3 years ago

            “When the [oil] price rises, people switch to electric cars.”

            Yes, by the thousands. :-/ Meanwhile, millions will hang onto their ICE vehicles as long as possible with the exception of those who can’t keep up the payments.

            “Electric cars are already impacting oil prices, subtly.”

            Too subtle to measure.

            “Wondered why oil can’t get over $50/bbl any more?”

            Not at all. It’s been in a downward trend since 2014 and that trend isn’t complete yet.

          • Mike Dill 3 years ago

            Sbean is correct that EV’s are not yet the primary cause for the current oil prices. Each electric car displaces about twelve liters per day. A ‘normal’ sweet, light, barrel of oil produces about one hundred and twenty liters of petrol. So we need about twenty million EV’s globally to reduce demand by two million barrels a day, which was enough a few years ago to cause an oil glut. Currently we are at about a million and a half globally, so we do have a way to go before that happens.

            Yes, millions of older cars will still be operational thirty years from now. Guess what. New cars get driven more than old cars. Cars that are cheaper to operate will be used more than those that are more expensive. If the EV’s cost less to run, they will be the ones running.

            I have an EV. I do not get oil changes, change spark plugs, get new mufflers, or go in for emission tests, as all of that maintenance is no longer required for an EV. Lower Cost of Ownership. Used they ‘cost’ nearly the same as ICE units from the same year.

          • Darren 3 years ago

            “Yes, millions of older cars will still be operational thirty years from now. ”

            Depends. No oil or petrol cars in india by 2030, france 2040..

            ICE has a limited shelf life now, by defacto oil too.

            TCO of EV’s will reach parity with ICE in 2018.

          • Coley 3 years ago

            Got an ICE , with mebbes a couple of years useful life in it, once it gets past that I’m going electric, I don’t think I’m alone in this scenario?
            Though I do think there’s a bit of a problem with manufactures trying to ‘milk’ the ‘early adopter market?

          • Coley 3 years ago

            Because oil producers can see the ‘writing on the wall’ they know their commodity has a very limited future and are individually trying to pump and flog it as quickly as possible, despite assuring each other that they will limit production-:)
            As the Saudi energy minister said (can’t remember his name) “the the stone age didn’t end because we ran out of stones”
            Ditto the “oil age”
            Yes, I know there will be many alternative uses for oil, as there are still many uses for stone.
            The upside is, we don’t kill millions to maintain our access to stones-;)

          • Greg Hudson 3 years ago

            Here’s an example of my personal experience with ‘those stupidly high electricity prices’. I recently sold my house, which had a 2kW PV array. I was paying 33c/kWh for power I bought from the grid (i.e. after the sun went down). Prices, BTW, went up another 20% on 1st July).
            My new house, with no solar, same power company (Red Energy) etc now costs me 19.71c/kWh for the very same power. How can this be? Because (In My Opinion) Red Energy SCREWS solar owners… There simply is no other explanation I can think of.

  3. neroden 3 years ago

    Sabotage laws are a real problem. Such as the idiotic anti-wind laws pushed by the governors of Vermont and Indiana.

    Thankfully it’s practically impossible to pass sabotage laws against home solar. They’re trying! The latest bogus scam is to use “fire code”. But the degree to which people will simply say “to hell with that law” is very very high when it comes to distributed solar.

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