With Inflation, Are Renewables Still Competitive?

May 16, 2022


Renewable electricity capacity additions broke another record in 2021 and biofuels demand almost recovered to pre-Covid levels, despite the continuation of logistical challenges and increasing prices. However, the Russian Federation’s (hereafter, “Russia”) invasion of Ukraine is sending shock waves through energy and agriculture markets, resulting in an unprecedented global energy crisis. In many countries, governments are trying to shelter consumers from higher energy prices, reduce dependence on Russian supplies and are proposing policies to accelerate the transition to clean energy technologies.

Renewable energy has great potential to reduce prices and dependence on fossil fuels in short and long term. Although costs for new solar PV and wind installations have increased, reversing a decade-long cost reduction trend, natural gas, oil and coal prices have risen much faster, therefore actually further improving the competitiveness of renewable electricity. 


9 Responses to “With Inflation, Are Renewables Still Competitive?”

  1. jimbills Says:

    Reuters had this article about another bottleneck a few days ago:

    Creaky U.S. power grid threatens progress on renewables, EVs

    ‘The report blamed federal and state policymakers, along with regional grid operators, for “insufficient leadership.”’

    • rhymeswithgoalie Says:

      “The federal government, however, lacks the authority to push through the massive grid expansion and modernization needed to withstand wilder weather and accommodate EVs and renewable power. Under the current regulatory regime, the needed infrastructure investments are instead controlled by a Byzantine web of local, state and regional regulators who have strong political incentives to hold down spending, according to Reuters interviews with grid operators, federal and state regulators, and executives from utilities and construction firms.

  2. John Oneill Says:

    If wind and solar intermittency can no longer be cruised through with cheap gas, it makes further expansion less attractive, not more so. The alternative is massive overbuild with curtailment, connection of distant regions with wind at both ends, and storage – all of which add further cost.

    • rhymeswithgoalie Says:

      I think storage is a way for countries with low wind and solar resources to protect themselves if they don’t have the massive up-front resources (or go into debt with the Chinese) to invest in a 10 15-year nuclear project.

      • John Oneill Says:

        With a state-backed build of nuclear, under threat of greatly increased oil prices, France went to 80% of electricity from nuclear in 15 years, from a standing start, while Belgium, Sweden, and Switzerland, in about the same time frame, went to about 40%. If batteries are as cheap as is claimed, they’ve yet to make any noticeable impact on any grid, anywhere. California is one of the major proponents, but batteries are almost invisible on the power graph (and net negative, as is their wont.)
        The material demands for what mathematician Tom Murphy called ‘ a nation-sized battery’ would be immense. We’re still hearing about various cheaper formulae than lithium ion, but these are still unproven at scale and duration. Lithium batteries do not age well with deep, frequent charge and discharge cycles, which would be essential for a solar- and wind-reliant economy. You’d probably have to recycle them at twice the rate turbines and panels were replaced. The current method for recycling Li-ion batteries involves baking them at 400 C for hours, under an argon atmosphere. Sounds like a job for fossil fuels, to me.

        • rhymeswithgoalie Says:

          I have no interest in long past accomplishments of nuclear power. They don’t seem to be replicable today.

          Why are current French nuclear projects well over budget and behind schedule? How likely are today’s French voters to choose and support a government that can get nuclear power plants built in a timely fashion.

          The greatest need to replace the worst GHG emitting power plants are in poorer and more poorly run countries.

        • rhymeswithgoalie Says:

          The material demands for what mathematician Tom Murphy called ‘ a nation-sized battery’ would be immense.

          Please don’t use a mathematician to analyze a political and engineering problem.

          He starts with an absurd premise (nation-sized battery to protect against power outages*), makes up bogus requirements (runs whole country, declares how long we’d “need” it to last), sets up a straw man (asserts lead-acid the cheapest choice then lists the obvious externalities), ignores engineering trade-offs (load-shifting, different storage scales), and ignores economic and political forces (contractual private price/demand agreements, pressures of grid power pricing).


          I’ll cut some slack for him, as it was 2011, so he didn’t know how fast storage technology would advance once the capitalists started seeing a future in it.

          *While managing peak demand is a clear issue, the leading cause of power outages are transmission failures, like Canada’s recent derecho, wildfire risk, ice storms, though Texas power plants are competing for the title.

    • greenman3610 Says:

      with the falling price of storage, which is already competitive with gas peaking – more expensive gas means more compelling case for storage. It certainly does not mean you stop generating with free fuel.

      • John Oneill Says:

        Ships all had ‘free fuel’ till the early 1800s, but within a century of the advent of the more reliable steamship, sail had been reduced to niche markets. More modern methods of using the wind – parasails, wing sails, Flettner rotors – have been developed more recently, but despite the free fuel, and pressure to reduce pollution and greenhouse gases, they’re still a tiny niche. Nuclear ship propulsion is largely confined to some naval vessels, but it hasn’t had as long to mature yet as coal took. Steam took longer to take over the oceans than it did on land partly because primitive boiler technology meant there were safety regulations limiting steam pressure to 25 psi for the first fifty years or so. I expect changes in technology, and increased public acceptance, will allow nuclear propulsion to bring the same huge advantages to the merchant marine as it has to the military.

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