Offshore Wind In Europe Won't Need Subsidies Much Longer (arstechnica.com) 83
AmiMoJo shares a report from Ars Technica: Once renewable sources of electricity meet or beat the costs of fossil fuel generation, everything changes. With the immediate financial benefit just as clear as the long-term environmental benefit, utilities turn their attention to how to make it work rather than debating whether it's worth the investment. Solar and onshore wind technologies have hit this point in recent years, but the unique challenges presented by offshore wind have required different solutions that have taken time to mature. Governments have provided some subsidies to encourage that progress, and global capacity grew to 28 gigawatts last year. But those subsidies make it trickier to calculate how close to cost-competitive offshore wind has become. A team led by Imperial College London's Malte Jansen worked to compare 41 offshore wind projects in Europe going back to 2005. The researchers' analysis suggests offshore wind, at least in Europe, is on the cusp of dropping below the price of more traditional generating plants.
Bids to provide electricity in these auctions have ranged from 0 euros to 150 euros per megawatt-hour, with that value setting the minimum guaranteed price. The 0-euro bids came in recent auctions in Germany and the Netherlands, and they represent utilities that were confident in their unsubsidized revenue selling at wholesale market prices. The researchers' estimates for actual revenue at these wind farms came in at 50-150 euros per megawatt-hour. But the interesting thing is the downward trend over time -- dropping about 6 percent per year over the whole time period, and more like 12 percent per year if you start with 2015. For wind farms that won't start operating until after this year, the range drops to 50-70 euros per megawatt-hour. And 50 euros, the researchers say, is at the "lower end of [cost] estimates for fossil fuel generators." That means subsidies have also been declining over time. In fact, the average is on track to hit zero by 2025. And if electricity prices rise at all in the coming years, a few wind farms that have already been bid will turn out to be subsidy-free in the final accounting. The researchers paint this as a success story. The researchers report their findings in the journal Nature Energy.
Bids to provide electricity in these auctions have ranged from 0 euros to 150 euros per megawatt-hour, with that value setting the minimum guaranteed price. The 0-euro bids came in recent auctions in Germany and the Netherlands, and they represent utilities that were confident in their unsubsidized revenue selling at wholesale market prices. The researchers' estimates for actual revenue at these wind farms came in at 50-150 euros per megawatt-hour. But the interesting thing is the downward trend over time -- dropping about 6 percent per year over the whole time period, and more like 12 percent per year if you start with 2015. For wind farms that won't start operating until after this year, the range drops to 50-70 euros per megawatt-hour. And 50 euros, the researchers say, is at the "lower end of [cost] estimates for fossil fuel generators." That means subsidies have also been declining over time. In fact, the average is on track to hit zero by 2025. And if electricity prices rise at all in the coming years, a few wind farms that have already been bid will turn out to be subsidy-free in the final accounting. The researchers paint this as a success story. The researchers report their findings in the journal Nature Energy.
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Yeah, what they're really saying is that it's not worth building them right now, but maybe in five years they'll be efficient enough that it'll be worth building them.
Don't hold your breath.
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It may very well be worth building them now. It all depends what your success metrics are. Cost vs traditional plants does not have to be the only metric.
The thing is that the traditional plants have always also been effectively subsidised too. They generate cheaper electricity now but only when you ignore the capital costs which were paid off at the start (so that investors get a quick return of their money rather than having to wait for the normal plant lifetime). Most of them would never have been built without either guaranteed prices or direct subsidies. There's a reason for this - if we had a completely free market then the supply would keep falling
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Fossil fuel, especially in Europe hasn't been subsidized for about half a century, if anything, the costs have been artificially increased by taxes and regulations. Fuel in Europe costs ~4x as much as it does in the US, that's primarily due to taxes and regulations. So it does require a ton of taxes and a ton of subsidies on the other end to make 'renewables' renewable.
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Fossil fuel, especially in Europe hasn't been subsidized for about half a century
wat
Go on, pull the other one.
Re:It worthwhile investment now? (Score:4, Interesting)
I think that quote is misleading without context, as the report [europa.eu] it is referencing seems to count subsidies in some perhaps unintuitive ways.
€5 billion go towards direct financial or tax exemption towards fossil fuel companies -- mainly in Germany, Poland and Italy -- with some of that being R&D and infrastructure improvements.
€5 billion go towards fossil fuel tax reductions in the UK and Italy.
€28 to €200 billion comes from how much less member states tax energy than the EU recommends. As an example, if the EU recommends a 20% tax on automobile gasoline, and a member state only taxes it at 15%, then that gets counted as a 5% fossil fuel subsidy. This also seems to include further tax rebates from the EU-recommended amount for the rail, shipping, aviation, and agriculture industries. To quote the report on the high range given:
Also worth noting is that the figures discussed deal with energy (fuels + electricity generation) subsidies, while the Slashdot submission is discussing specifically electricity generation subsidies.
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Well, this is Europe we're talking about, of course they'll have success metrics.
Re:It worthwhile investment now? (Score:4, Interesting)
Don't hold your breath.
Unless you live near a fossil fuel plant, which is continually producing pollution it doesn't even have to pay for... unlike a wind or solar farm.
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What should be done about pollution is a good thing for democracy to debate. As the polluting industry vastly enriches the society, some tradeoff is warranted. Even as pollution skyrocketted in industrializing England, life expectancy increased over the dirt-floor poverty of the ages before.
Anyone grinding that to a near halt in the name of clear skies would have been a mass murderer, not savior of anything. Just look at the sorry state of 3rd world countries today, without freedom from corruption or dic
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Re: It worthwhile investment now? (Score:2)
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Or healthcare costs due to pollution.
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Or the pollution caused by the increased healthcare (pretty much 95% of the things used in hospitals are one-use only, there's the packaging for those items, etc).
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Are you that stupid, or is that the nitrous talking? If the latter, give it 30 seconds, and you'll snap out of it.
Don't hide behind an Anonymous Post if your going to abuse.
I was just pointing out to the previous poster that for an Industry to grow and survive it needs public funding and I thought the example of cars and roads being built with public funding is a good example.
Whats stupid in that ?
Re: It worthwhile investment now? (Score:2)
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Roads can be used by horses or pedestrians just as much and have been 'subsidized' for a lot longer than even the steam engine.
Renewable energy still requires a ton of subsidies while taxing other forms of fuel, even though some of them, like natural gas, are cleaner than producing a lead-and-arsenic panel. Solar panels are just outsourcing our pollution problem to China, solar collectors on the other hand would be a true 'clean' energy source, but for some reason people aren't willing to build those.
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I guess solar collectors aren't cool enough.
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No, they don't have subsidies and thus are hella-expensive and the yield (8/24h of 'good' solar energy on a good day) isn't good enough.
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Much (I don't know what %) of the cost of building and maintaining roads and bridges that roads go over is paid for out of gasoline taxes. So much so that it's an issue in some states (Mississippi is one) whether the cost of registering an electric car (which of course pays no gasoline tax) should be increased to compensate.
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Much (I don't know what %) of the cost of building and maintaining roads and bridges that roads go over is paid for out of gasoline taxes. So much so that it's an issue in some states (Mississippi is one) whether the cost of registering an electric car (which of course pays no gasoline tax) should be increased to compensate.
Yes I agree , It will be certainly interesting to see how this problem is solved as people these days do not like paying taxes
which is what this increased registration fee will look like.
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30 years ago, for $2000 you could convert your car to use natural gas at the flip of a switch in the Netherlands.
It was cheap, too. Government got no gasoline tax money, so they slapped an annual tax on these cars such that you had to drive 20k a year to break even.
So much for encouragement vs. voracious government. Never forget that.
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And when was the last time an airline built an airport? If transportation is such a valuable public service, why aren't people willing to pay for it through user fees alone? Why must the cost be hidden in unrelated taxes?
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Most general aviation airports in the US (small, local airports that accept privately-owned personal or business planes) are private, and are owned either by a single owner, a private company, or an association made up of those who own hangars or other facilities at the airport.
It's a little more murky on the other airports, but most airports these days in the US aren't subsidized and effectively operate as a private business.
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Most people have never flown in or out of one of those tiny, privately-owned airports, so let's ignore them in this discussion.
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And when was the last time an airline built an airport?
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The discussion where he avoided answering that question, yes.
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He meant the giant honker regional airports that are typically owned by local governments, outlawing any remote competition, so they can profiteer off it.
Those airports.
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Same reason as the $302 billion in oil subsidies [issues.org] since 1950, perhaps?
Re:It worthwhile investment now? (Score:5, Insightful)
1) Economies of scale.
If you make wind turbine. It costs $50,000,000 and will never be profitable.
If you make 1000 wind turbines, they cost $500,000 and will be profitable after 10 years.
If you make 10000 wind turbines, they cost $100,000 and will be profitable after 2 years.
And then you can start taxing them on their income the 3rd and further years.
Plus have less polluting power.
2) Competing subsidies.
The existing subsidies for oil are frikkin huge and include much of the combined cost of the navies and armies of the world.
The Desert Storm and subsequent gulf wars cost 3 trillion dollars total (including rehabilitation for wounded vets, disability pay, etc).
Oil *and* Coal also receive huge subsidies in terms of favorable tax code they lobbied for over the last 100 years. Coal in particular has some really sweet coal field subsidies.
3) Existing competition issue.
Say you have one toll road between two cities. It charges onerous rates. Everyone hates it.
But you won't get a second toll road because it's expensive to build. And the instant it's finished, the existing toll road can lower prices so much the new tollroad goes bankrupt. Then they buy it and let it rot or charge onerous rates on *both* toll roads.
It's like this with energy too. They've spent a lot of money to crush alternative energy. Failing that, they'll lower prices (temporarily) to crush it. So competition with existing onerously priced items may need subsidies until they mature and can withstand this monopoly practice.
That's 3. There are others but those are the most important.
In the opinion of many (and myself) The government's job is to see to the benefit of the citizens. This is often at odds with the interests of existing big business. The government is *only* to help existing businesses to the point it helps the citizens. Not to the point where existing businesses can function as monopolies.
But hey- if you want to pay monopoly prices- that's cool. It's just not a majority opinion. And your opinion may be the result of some pretty subtle propaganda and brainwashing via "news" that was actually created by the fossil fuel companies as well as "expert opinions" who turn out to be paid hundreds of thousands a year by fossil fuel companies.
Dig in- find out- act in your own self interest- which is probably going to be short term subsidies for newer cleaner, ultimately cheaper energy sources.
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Shame I haven't any mod points today -- would give +1 Insightful
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How do you mod and comment on the same article? /. doesn't let me do that. Do you have two /. accounts?
Re:It worthwhile investment now? (Score:4, Informative)
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Years ago I prognosticated lowering of green costs would cause government to start taxing it instead of subsidizing it, meaning the final financials were yet to be determined. I was modded down.
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Point 1 is totally flawed. Economies of scale work, but not like that. These HUGE wind turbines will never be $100,000 or even $500,000 to produce. Heck, I don't think you can assemble one for $100,000. Let me expand.
If you've ever get the chance to have a tour of a wind far, do it. It's very eye opening. The blades in the wind farm I toured ranged from 80 feet to 200 feet. They said the next one was to be 400 feet. Each of the 3 blades have to be balanced by weight and size or it will tear itself a
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I get your point and it's valid.
So no, I wasn't doing research for actual figures. I was making the basic capitalist point about economies of scale (which I think you agree with). A windmill today with the capacity of a windmill a decade ago is probably a fraction of the price. Or the windmill that costs what that one did has amazing maintenance costs, estimated lifespan, output, etc.
What we do know is...
https://www.treehugger.com/ene... [treehugger.com]
The cost to payback a 2mw windmill is under a year.
https://arstechn [arstechnica.com]
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"Why subsidy in first place? If worthwhile, it already made worthwhile!"
The oil industry gets subsidies for a hundred years now, because it's a young, coming industry I guess.
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The oil industry gets subsidies for a hundred years now, because it's a young, coming industry I guess.
dot dot dot he typed in on his cell phone or computer, and pressed post, everything in that enterprise relying on oil and other hydrocarbons (or even maybe a little green energy!), imagining he isn't going to pay for it one way or the other, the rest being accounting gimmicks, selected from the outrage planks of a few politicians at the tippy top, seeking your vote for re-election so relatives can mysteriously get rich.
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Why subsidy in first place?
Because governments have only two levers to enact policy: Legal, and financial. And while some people think the world is best left without governments and for free markets to reign supreme, those people fail to have the foresight that they will ultimately die at the hands of those who made money of their lives.
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Then why subsidize oil exploration? Why subsidize anything?
Of course, the concept of social progress is completely alien to you, and I'm sure you live right next to a coal-fired power plant.
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National Health Service in the UK pays for all of the health effects of emissions. You can subsidize companies to shut down dirty polluting sources of emissions and save that money from hospital Asthma and Hearth emergency services.
And the sooner that transition happens, the more years of benefit you get for the same price.
Imagine there was a vaccine for Asthma. Would you spend $1B over 10 years to slowly vaccinate the population? Or would you vaccinate them all on year one? You would want to vaccinate
Re:Let the courts sort it out (Score:5, Insightful)
As long as the oil, nuclear, gas and coal industries keep raking in the subsidies, there's no reason to abolish them for wind or solar.
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Eventually even with subsidies they will become unprofitable. A lot of fossil plants in Germany are finding that they can't make money any more because of all the cheap renewable energy that is available.
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If you think EUR 0.25/kWh is cheap. Sure. There is no free market in Germany for energy so fossil plants cannot compete with 'you have to give free because the governments says so'.
When the bill in Germany comes similar to my $0.04/kWh from actual privately owned free market renewables (primarily hydro and nuclear) then we can talk.
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You are confusing whose vs. retail electricity markets.
See here, for an unsubsidized LCOE analysis:
https://www.lazard.com/perspec... [lazard.com]
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I am talking retail costs:
According to “Strom Report” (based on Eurostat data), Danish and German retail consumers paid 30.5 Euro cents for a kilowatt-hour of electricity in 2017
Average costs elsewhere, unsubsidized average between 10 and 15c/kWh
On the low end in the US, there are many places that pay between 4 and 8c/kWh, such as co-op providers that buy (natural) hydro and nuclear energy in bulk.
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The German situation is more complicated than that though. In addition to renewables generally costing less than hard coal and brown coal (lignite) when they're generating electricity, there is increased competition from lower natural gas prices, which are seeing deployment increases. Carbon costs by electricity plants have to be partially offset on the EU Emissions Trading System as well, which is a disincentive for especially brown coal.
The coal plants can still cover their costs and be profitable as thei
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Depending what you call "peak demand", coal plants are not used for that but, gas turbines and pumped storage.
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"Peak demand" as in when Germany consumes the most electricity, which occur around 12:00 to 18:00 daily, especially during winter months. Their hard coal plants cycle up and down around 50% daily, and will be running at full to help match the daily demand unless there's plenty of wind and solar available. Natural gas plants and pumped hydro will be dispatched as well.
Peak demand can also refer to periods when dispatchable electricity is needed the most, i.e. what isn't being covered by intermittent sources
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Germany has two "peaks", one around 12:00 and one around 18:00. Depending on time of the year.
That is why I write "peak" in quotes. The other "peaks" are the fluctuations by the minute, which are obviously not covered by coal plants because they are to slow.
So if english speaking ppl say "peak" I usually ask what they mean.
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Coal plant ramp up in the morning around 5:00, and stay ramped up till about 2:00 at night, ramping down slowly after 21:00.
No idea what you are talking about :P
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Especially lignite is adapted to peaks. Even more so than gas. I assume because gas is so cheap now.
No need to speculate. Plots are here: https://www.energy-charts.de/p... [energy-charts.de]
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I do not need to understand anything, I only wanted to know what you mean with "peak".
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Its preferable not to cycle plants but you definetly can which is what the germans are doing. It decreases their life in the long term due to fatigue on the components (creepage) but it is viable compared to mothballing them now.
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Isn't that a reason _to_ abolish them (for the rest of us who don't own them, I mean)?
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It isn't all about efficiency (Score:4, Insightful)
All the people complaining about subsidies have no idea how the real world works. To get renewable construction on a scale where you can power 750 million people requires decades of insights, training and lessons learnt. The whole point of subsidies is to make this happen over a shorter time scale that has been agreed as part of various government green energy initiatives.
It isn't all about efficiency, companies need to work out installation and maintenance methodologies, train up work forces. Get 10-20 years real world experience under their belts before plowing on full steam ahead with our massive roll out of infrastructure.
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There are a lot of people already working in offshore wind in Europe. No need to wait. Many of those are well experienced with offshore work thanks to the oil and gas industry.
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Those complaining completely forgot that until recently all electricity producers where state owned and build build with tax money. And in France e.g. this is still the case.
Sounds better than Browns (Score:2)
global capacity grew to 28 gigawatts
Or 1.46 McFlys.
They really didn't see this coming? (Score:2)
sounds like a propaganda piece (Score:1)