Good News for Planet. Bad News for Science Deniers. Renewables Breaking Out Everywhere…

September 24, 2013

Good news for the planet is, of course, Mr. Yuck for climate deniers.

Four key technologies in ascendance. Wind, for instance.

A new report from Michigan Public Service Commission shows that wind energy is now “essentially equivalent” to conventional generation in cost.

Michigan’s current Renewable Portfolio Standard (RPS) requires electric providers to ramp up their use of renewable energy in order to obtain 10% of their electricity sales from renewable resources in 2015. Those goals are expected to be met in nearly all cases, and the exception has announced plans to wind down service.

The RPS has resulted in approximately 1,400 MW of new renewable energy projects operating or currently under development in our state (94% of these new projects are wind energy projects and approximately half are non-utility owned). By the end of 2013, in total, Michigan consumers will have paid approximately $675 million in surcharges supporting this expansion.

Due to decreases in renewable energy costs, surcharge collections are expected to be significantly reduced or even eliminated for some electric providers beginning in 2014, because project costs are in some cases essentially equivalent to conventional generation under current conditions.

..and continuing to get cheaper, I might add — because the more fossil fuels you use, the more expensive they get, but with renewables, its just the opposite, the more you use, the cheaper they get.

Of course, wind has the advantage of being, well, free – in the sense that utilities and customers know that the base cost of the fuel will be the same 25 years, and 2500 years, from now, as it is today.  For utilities, this makes signing a 20 year contract much easier.

A new annual wind energy evaluation for the entire US from Berkeley Labs shows that wind energy is cheaper than ever, and continuing to drop –

Falling wind turbine prices are pushing installed project costs lower. Wind turbine prices have fallen 20 to 35% from their highs back in 2008, and these declines are pushing project-level costs down.  Based on a large sample of wind projects, average project costs in 2012 were down almost $200/kW from the reported average cost in 2011, and down almost $300/kW from the reported average cost in both 2009 and 2010.  Among projects built in 2012, the windy Interior region of the country was the lowest-cost region, with average project costs of ~$1,760/kW.

Wind energy prices have been falling since 2009, and now rival previous lows.Lower wind turbine prices and installed project costs, along with improved capacity factors, are enabling aggressive wind power pricing.  After topping out at nearly $70/MWh in 2009, the average levelized long-term price from wind power sales agreements signed in 2011/2012 – many of which were for projects built in 2012 – fell to around $40/MWh nationwide.  This level approaches previous lows set back in the 2000-2005 period, which is notable given that wind projects have increasingly been sited in lower quality wind resource areas.  Wind energy prices negotiated in 2011 and 2012 are generally lowest in the Interior region of the U.S., with prices averaging just above $30/MWh, and typically ranging from $20-40/MWh. Even with today’s very attractive wind energy prices, however, wind power sometimes struggles to compete with what are currently very low natural gas and wholesale power prices in many parts of the country.


1. Wind deployment
Since 1999, the average wind turbine has increased electrical output by 260 percent. So although turbine prices have risen in recent years, the cost of electricity from wind has fallen to around 5 cents per kilowatt-hour — a 90 percent drop since the 1980s. In 2012, wind was the single largest source of new electricity capacity in the U.S., beating even natural gas.

2. Solar photovoltaic (PV) deployment
As we recently pointed out, there is now a solar PV system installed in America every four minutes, up from every 80 minutes in 2006. According to GTM Research’s Solar Market Insight report, the national average price of an installed PV system declined by 26.6 percent in 2012. That drop has been helped by a strong reduction in module costs and pricing due to global oversupply. The DOE points out that the cost of a solar module in 2012 is 1 percent of what it cost 35 years ago.

Consequently, two-thirds of all distributed solar PV capacity in the U.S. has been deployed in the last 2 1/2 years, GTM Research Senior Analyst MJ Shiao recently showed.

3. LED Deployment
As lighting manufacturers ramp up production, the cost of producing an LED relative to the cost of raw materials has declined by 25 percent each year. This leads some experts to conclude that LEDs may represent 80 percent of all new lighting by 2020. According to the DOE, there were 400,000 LED lights deployed in the U.S. in 2009. With 20 million deployed today, that number has increased by a factor of 50. According to a recent survey from Sylvania, 35 percent of U.S. households now have at least one LED light.

4. Electric vehicle (EV) deployment
After multiple fits and starts, the electric vehicle market in the U.S. is finally starting to make some progress. In the first half of this year, sales of electric vehicles have already been more than double the total of all sales throughout the entirety of 2012. In California, Tesla is outselling high-end cars like Porsches, Lincolns, Land Rovers and Jaguars. And although battery makers have struggled to find customers and appropriate business models, the DOE reports that the cost of manufacturing an EV battery has dropped by 50 percent since 2008.

12 Responses to “Good News for Planet. Bad News for Science Deniers. Renewables Breaking Out Everywhere…”

  1. omnologos Says:

    I thought the problem with wind was the need of having conventional power generation in constant stand-by? Do the figures above include any of that?

    • omnologos… You’re referring to a common bit of mis-information. First, renewables are not 100% of electricity generation, so no, you don’t have to have “constant stand-by” power. Second, renewables are actually FAR more responsive on the grid since they can bring power online almost instantly, as opposed to all forms of FF generation which requires much longer response times to spin up. Third, renewable sources tend to follow demand. Fourth… yes, the list goes on and on.

    • MorinMoss Says:

      Better forecasting has mitigated of lot of the perceived problems with intermittent generation.

      And when you have power sources that can be quickly throttled back or ramped up – gas plants, some modern coal plants, hydropower – you don’t really need any extra spinning reserve.

      At some point, you will need extra reserves or storage but only a few places are at that point and a well interconnected grid can cope.

  2. andrewfez Says:

    Without looking into it, the market seems rather exuberant on the company Cree, who makes affordable LED lights sold at Home Depot. Like a lot of the disruptive tech these days, they’ve had huge gains in their stock price over the last year. Folks that pay attention and know what’s coming are making themselves rich. Cree looks severely overvalued presently, without actually looking at their projected earnings growth.

    I add to my position on GE from time to time. They’re pretty intensive in the gas and oil industry and are hungry for more of that, as they try to get rid of their retail finance division, but they also are pretty strong in the wind turbine market, and are well positioned to take advantage of the explosion.

    But to be sure, the next major dips in First Solar and SunPower (hopefully when QE gets pulled back), and I’m going in. I think it’s about time. Lot’s of folks got severely burned a decade ago on green energy companies, but this time around, their becoming competitive w/o subsidies.

  3. MorinMoss Says:

    Glad to hear LEDs are coming down in price but still not affordable enough for me.
    Closing in on 10 yrs entirely on compact fluorescents.

  4. Wind can be oversized instead of providing storage or backup. Solar and wind together increase dispatch ability, because it is often windy during storms when solar output is reduced. With wind and solar deployment rates at 20%, there is a long way to go before storage is needed. Watch for storage costs to reduce in the near future. Renewables are taking over.

    • MorinMoss Says:

      Problem with oversizing is that you need more space & infrastructure just to support the additional turbines; storage can be centralized.

  5. Very happy to see this momentum on renewables and electrical cars. It gives me a sense of hope that we can get off the fossil fuel train in a couple of decades. No doubt a bit of challenges lie ahead, like finding good ways to store excess power and draw from it when there is no wind or sun. I hope for a typical home that the electrical vehicle can work as a backup if they design the car charging so that you can draw from the battery as well.

    Getting an electrical car this year (Nissan Leaf), and if the sun had been shining a bit more here on the west coast of Norway I wouldn’t have hesitated to get a solar panel rig and see how well I could charge the car battery from that alone. A typical day of driving for me would be 25 km (although this has gone down after I started using public transit more) so there isn’t a whole lot of power I need to charge that up again (range of e.g. the Nissan Leaf being 100-150 km depending on temperature). Now my main problem is if I drive the car to work, its mainly parked by the office during sun hours so that solar panel at home wouldn’t help much then. 🙂 – So perhaps a new invention would be a cover for the car which is basically flexible solar cells and that could trickle in some energy to the battery while its parked! 🙂

    • MorinMoss Says:

      I think flexible / spray-on cells that are efficient enough are still years away.
      In the near term, they might provide enough energy to keep the car warm or cool without depleting the battery.

      The Fisker Karma had an option for a rooftop solar panel but it was a few thousand $ – just ridiculous. Better to spend the money on solar at home to charge your car off-grid.

  6. fredeliot Says:

    As a point of reference on the price of LED bulbs, I was able to buy this week at Costco packs of three 500 lumen, 8 Watt, warm white, dimmable , bulbs for $10. They were available in both regular and a decorative globe format. This price included a power company subsidy of $10. Almost the entire bulb section at Costco is now LED’s. The instant full brightness and longer expected life make them a better choice than CFL’s. The only drawback is I probably won’t live long enough for them to burn out so I can replace with the new super high efficiency, 200 lumens/Watt, LED’s.

  7. Gingerbaker Says:

    Due to decreases in renewable energy costs, surcharge collections are expected to be significantly reduced or even eliminated for some electric providers beginning in 2014, because project costs are in some cases essentially equivalent to conventional generation under current conditions.

    What a perfect description of the inanity of our utility policy!

    Customers are being charged *extra* to pay for new renewable energy infrastructure! Why should customers be paying extra for this – shouldn’t our government be paying these surcharges for us? Is it not in our government’s best interest to subsidize new renewable infrastructure? Of course, the answer is YES. So why must customers foot that bill?

    Why do we even entertain the whole idea of cost-competitiveness of renewables vs conventional energy suppliers? Every day a conventionally-fueled power plant is on-line, it adds more CO2 to the atmosphere, and the true cost of this pollution is never included in the analysis of cost-competitiveness. So, why talk about cost-competitiveness?

    Every day a conventionally-fueled power plant is on-line, it uses money to purchase fuel – money which would be much better spent on acquiring renewable energy infrastructure which doesn’t require fuel.

    How much simpler this whole situation would be if we simply nationalized our electric utility system, a system which is semi-public to begin with. Then, all of our new renewable energy infrastructure would be mandated and deployed using Federal tax monies and all of it could be used to build only renewable energy infrastructure and grid upgrades. As taxpayers, we would then ‘own’ our new electric system. And once the infrastructure capital investments were paid off, we could be enjoying free electricity.

    We need to jettison this whole idea of the “cost-competitiveness” of renewables. Every dime we spend on fossil fuels is a dime we have wasted on a product which is killing us. And it is a dime not invested in building and deploying new renewable infrastructure – which is the most important thing we can do with our time and resources.

  8. Bruce Miller Says:

    Super insulation to reduce home heating/cooling costs? Long suppressed by Corporations in the depths of Patent Hell? Will China market them first? Solar powered refrigeration, also well hidden – Google Crosley Balls, Einstein cycle refrigeration. Sweden’s Servel gas fridges. Germanies de-centralized electric system. Will LED’s eventually be supplied by local solar charged batteries and much cheaper much lighter D.C. wiring – or a wireless wi fi like power distribution? Honda already has a natural gas powered generator/heating plant?

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