There’s a new story on BNEF explaining how the cost of wind power is now less than any other resource in the UK and Germany. That alone is confusing, because, depending on your definition of cost, that was already the case. In fact, it’s always the case: on the margin, the cost of wind energy is $0. It’s the machine you’re paying for.
But the article is even more puzzling because it then goes on to explain that what is happening is that renewable energy generation is displacing the generation from fossil units, so that their capacity factor (that is, utilization) goes down. This makes their fixed costs a larger percentage of their total costs, and makes all-in €/MWh higher than wind’s all in €/MWh.
Okay, that makes sense as far as it goes, but there’s one complication: they still need the fossil units to make the system work. That is, as solar and wind generate more energy, you may use your coal machine less, but you can’t operate the electric power system without the coal machine. Cheap, massive, and ubiquitous storage, of course could change this, but for now, we’re not there.
So that begs the question, exactly what turning point have we reached? Building more solar and wind exacerbate this situation (I will not call it a problem) so I’m pretty unclear on what this piece is saying.
I occupy a very lonely position on renewables. I want them, I think they’re important, and I think we need much more. They can be part of solving our huge climate problem. But, unlike most boosters, I don’t think renewables are a free lunch — that is, they will be, all-in, cheaper than our current system).