12/19/2016

Cheaper than Coal


We hear a lot that "solar is already cheaper than coal," but this is obviously just PR. To begin with, these two sources of electricity cannot be easily compared. They are different animals altogether. Coal is a 24/7/365 type of power. Solar is intermittent and unreliable.

Coal produced electricity tends to be more valuable because it is produced when it is needed. Solar, on the other hand, just dumps energy into the grid whether it is needed or not. Also, for the most part, solar PV does not allow the retirement of any conventional electricity capacity because at any particular moment the output from solar is zero and thus the conventional power plants have to supply the required power.

At higher latitudes, the annual insolation variation can be extreme. For example, in Germany the insolation in July is close to ten times higher than during December. Additionally, Germany tends to require more electricity in the dead of winter.



To be able to compare apples to apples, we would need to compare coal with solar PV plus a pairing natural gas driven power plant. Once the pairing power plant is added (or worse, storage) there is no way solar will be cheaper than coal.

Aside from the overt subsidies, solar also has a covert one: priority access to the grid. When it dumps electricity into the grid, other (reliable) producers have to adjust their output to accomodate for the solar fluctuations. This increases the costs for those other producers and thus the overall cost of electricity tends to go up. How long will solar producers be allowed this free lunch?

Bottom line, the only way to say that solar PV costs are a fraction of the coal ones would be to express it this way: seven thirds.

Feel free to add to the conversation in Twitter: @luisbaram


12/08/2016

Talking Straight


In the energy discourse we are sometimes very careful but hey, once in a while we have to talk straight. Here is what we have to say respecting some energy sources:

  • Fracking: yes, it creates earthquakes (sometimes). However, since natural gas mostly replaces coal, this is the fastest way to reduce CO2 emissions (and increase methane ones). Also, renewables need reliable, dispatchable pairing power plants and natural gas is ideal in this application.
  • Nuclear: there will be more nuclear power plant accidents. Let's get over it. Yet, in spite of the future accidents nuclear will almost certainly continue to be the safest energy we have. The greatest danger seems to be to overreact and order evacuations when they are not really needed. There is an inherent danger in modern life (just like in flying in an airplane) but hey, we are much, much better off than we were in the past. Oh, and by the way, nuclear is very low CO2. Lower than solar and a match for wind. Are you listening Greenpeace?
  • Coal is better than wood and much better than no energy at all. Coal is today, by far, the #1 source of electricity globally. I think almost everybody agrees electricity is good, so coal is also good (although not as good as natural gas or nuclear). And yes, it could be argued coal saved the forests (the ones we still have left today).
  • Oil is the best transportation fuel. If not, why do you think almost every car, ship and plane is oil powered? Our world would be much, much smaller without oil. Let's stop complaining and feel grateful for what we have. Will EVs eventually take over? Let's remove all their subsidies and see if they can compete in the open market.
  • Renewables: they are a niche energy source but vast amounts of subsidies are being channeled to "clean energy" companies all over the world and in particular to China. Hey, these people have families to feed. Want to see a success story in Europe? Look at the stock price of Vestas. 
  • Geothermal, wave / tide energy, etc. These are super niche energy sources. They work in some places like Iceland or Korea but will go nowhere. However, they are a great conversation subject.
Having access to abundant, affordable energy is the blessing of our civilization. Actually, our civilization would crumble in no time at all without energy. Most of this energy is, and will continue to be, fossil fuel based.

Sure, eventually (eventually doesn't mean soon) nuclear may take over but until then, let's say it all together: I love fossil fuels!

Feel free to add to the conversation in Twitter: @luisbaram