Climate Denial Crock of the Week

CNBC:

Record-high coal and gas prices have been pushing prices higher for consumers and businesses alike, but there could be a silver lining.

According to the findings of climate analytics firm TransitionZero, it is now cheaper to switch from coal to clean energy, compared to switching from coal to gas — thanks to the falling cost of renewables and battery storage, coupled with the rising volatility of gas prices.

“The carbon price needed to incentivize the switch from coal generation to renewable energy for storage has dipped to a negative price,” said Jacqueline Tao, an analyst at TransitionZero.

“So essentially that means that you can actually switch to renewables at a cost saving,” she told CNBC’s “Street Signs Asia” on Wednesday.

The report claims that the global average cost of switching from coal to renewable energy has plunged by 99% since 2010, compared to switching from coal to gas.

Juan Cole Informed Comment:

A lot of municipalities in wind-corridor states such as Texas are choosing wind or solar over methane gas because they need to make 20-year budgets. Fossil fuel prices are erratic and volatile, as can be seen this year when they have spiked in part because of the Russian invasion of Ukraine. So you can’t predict the price twenty years out. But since wind and sunshine are free, you know exactly what the fuel for solar and wind farms will cost in twenty years. It will still be zero. You can’t as easily predict replacement costs for wind turbines or solar panels, but they actually will likely fall even further in price, so wind, water and battery are good bets.

TZ says that upward pressure on fossil fuel prices is being exerted by the unwillingness of many banks to finance exploration for new oil and gas fields. Typically the fields themselves are offered as collateral. But there is a real chance that the value of an oil field in twenty years will be zero because a series of climate-driven disasters convinced the public to outlaw them, or because wind, solar, battery plummeted further in cost, making fossil fuels too expensive for daily use. There is also a danger of the coal or gas plant contributing to the climate crisis and facing blowback from extreme weather damage. If banks won’t offer financing for exploration and development of fields, then the world supply will be stagnant even as demand rises, pricing fossil fuels out of the energy market compared to renewables.

Already in 2018 economists found it was cheaper to build and operate a new wind or solar farm than just to go on operating a coal power plant. This is true for 80% of the 240 coal power plants in the US, according to Silvio Marcacci at Forbes.Although coal experienced a slight revival in 2021, it is now rapidly declining again. Some 12.6 gigawatts of coal power capacity will be shuttered in 2022, according to the Energy Information Agency, which is 80% of all retiring power plants. Even Duke Energy and Georgia Power will get out of the coal business between now and 2035, replacing the lost generating capacity with wind, solar, battery. Coal has fallen from a majority of US electricity generation to only 20% in the past decade.

The current run-up in global gas prices doesn’t look like it’s going to ease off any time soon. But experts were telling me even 2 years ago that renewables were already outcompeting gas, even at then record-low prices.