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Will Renewable Energy Lead to More Cost Stability?

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Jane Marsh's picture
Editor Environment.co

Jane Marsh is the Editor-in-Chief of Environment.co. She covers topics related to climate policy, sustainability, renewable energy and more.

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  • Dec 30, 2022
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Fossil fuel prices often fluctuate wildly. That’s because they’re vulnerable to supply chain issues all the way from the ground to the gas tank, with disruptions like limited availability, transportation shortages, and spills influencing their worth at any given time. Additionally, because of the physical nature of oil and gas, countries can stockpile and withhold fossil fuel stores to further drive up demand, wielding energy as a political weapon. That’s why renewable energy leads to greater cost stability.

Current Energy Trends

In 2021, fossil fuels made up around 82% of primary global energy use, down from 85% in 2017. It’s a slow but significant decline, and will likely decline even faster as more people make the switch to renewable energy. In fact, 2021 saw a 15% increase in global renewable energy consumption.

The pandemic and the Russo-Ukrainian War spurred renewed interest in renewable power. People saw the direct environmental effects of taking cars off the road, and many countries wanted to generate more of their own power to lessen their reliance on Russian oil. Additionally, massive spikes in gas prices prompted people to rethink the need for gasoline, spurring a wave of electric car sales.

In addition to being better for the environment, renewable energy leads to more economic stability.

How Renewable Energy Stabilizes Costs

Renewable energy has a few qualities that make it more stable than conventional fuel sources.

Reliability

Though overcast and windless days are part of life, they’re temporary, making solar and wind reliable energy sources overall. Wind and solar farms are often set up in areas that maximize the amount of wind and sun they receive, and the energy is then transferred to homes and businesses.

Batteries allow people to store the generated electricity for use at night or in less-than-favorable weather conditions. Unlike oil, renewable energy sources can’t accidentally be spilled or catch fire.

Inexhaustibility

As long as Earth exists, the planet will never run out of wind and sunlight. What’s more, renewable resources belong to everyone – you can’t hoard sunlight and use it as a negotiating tool, doling out small amounts at inflated prices. Renewable resources are an inalienable right. Their inexhaustible nature leads to greater cost stability.

If fossil fuel consumption continues at the current trend, eventually, oil and gas will reach a point where they become scarce. This will lead to further cost instability as the price increases.

Accessibility

As renewable energy technology becomes more widely available, it’s also become more accessible to the average consumer. The price of solar panels and wind turbines has fallen dramatically in the last several years and will likely become even lower as time goes on.

Renewable energy increases cost stability through the use of residential solar panels. Individuals can generate their own reliable electricity with solar panels on their roofs or in their yards. This often generates enough power that the homeowners don’t have an energy bill, letting them avoid the headache of fluctuating monthly prices.

Often, solar panels generate enough electricity to cover a household’s needs even during heat waves or winter storms. So, while other people’s bills are going up during times of peak demand, people using renewable energy have stable costs – usually just the price of a monthly service fee.

Longevity

Once a wind or solar farm is installed, it can continually gather energy in one place. Solar panels last an average of 25 years and wind turbines generally have a life span of 20 years.

When they do eventually need replacing, they can simply be swapped out. There’s no need to find another operable site, drill a well, deplete the resources there, and repeat the process in a new location. This makes renewable energy plant installation more cost-effective than extracting oil and gas.

Ease of Maintenance

There’s also no need for a large paid labor force to continually work on extracting energy from wind and solar farms.

Factoring in situations like labor shortages, wage fluctuations, and bad-weather days that make it hard to work, oil and gas extraction becomes even less cost-stable. Aside from routine maintenance, solar panels and wind turbines do practically all the work themselves.

Flexibility

Renewable power plants can be set up almost anywhere.

Solar panels are so non-disruptive that they can be placed directly on buildings, yet also durable enough that they can withstand being placed in a scorching desert or floating on a lake. Wind turbines can be set up anywhere from a pasture to far off the ocean’s coast. This versatility makes renewable energy a more stable energy source, leading to predictable costs.

The Many Benefits of Renewable Energy

Due to their versatility, ease of setup, longevity, reliability, and inexhaustible nature, renewable energy sources lead to greater cost stability. Right now, they’ve only just begun finding their place next to coal, oil, and natural gas, but soon they will overtake fossil fuels as the standard form of energy. It’s only a matter of time.

Discussions
Xisto Vieira Filho's picture
Xisto Vieira Filho on Jan 3, 2023

Jane, you have put together some interesting thoughts about  inserting renewables into a power grid. However , I can imagine that you are not a power system engineer, because of what you have pointed out about "reliability" In fact, renewables are not reliable sources, not only due to the natural intermencies, but mainly due to stability issues. In fact to be a reliable source, it must have inetia and strong controllers of frequency and voltage.

Today we cannot still have adequate ancillary services to substitute such controls and inertia, but this thing will be better solved in the future, even with gas fired plants using green hydrogen.

And again, congratulations for this article.

Roger Levy's picture
Roger Levy on Jan 6, 2023

There is no economic and engineering logic behind this article and the premise completely ignores reality.  Wind and solar are not reliable resources.  Unlike many existing generating resources, when they reach their useful lifespan they are either difficult or impossible to recommission.  Most significantly, today’s energy price volatility is principally due to policy and economic preferences for renewable energy.  

Roger Arnold's picture
Roger Arnold on Jan 11, 2023

Jane, you've written a pretty good recap of the major talking points that wind and solar energy partisans put forward to advance their cause. Individually, all of the points have at least some basis in fact. Collectively, they are highly misleading. They create a false impression that we can painlessly resolve our energy issues by simply continuing to deploy more wind and solar energy resources. The fossil fuel-based energy infrastructure that underpins the world economy as it  exists today can be seamlessly replaced by a renewable energy economy, and everything will be fine. Or better than fine; energy will be cheaper and more reliable, without those pesky carbon emissions that are wreaking climate havoc.

That's fantasy. If the points you recount were completely true, then regions with high penetration of wind and solar resources -- e.g., Germany and California -- would enjoy lower rates and higher reliability for their electricity than neighboring regions. But what we see is the opposite. Regions with more wind and solar energy pay higher rates and experience more frequent power outages.

The following statement, in particular, struck me as disingenuous:

Though overcast and windless days are part of life, they’re temporary, making solar and wind reliable energy sources overall.

What does "reliable overall" mean in that context? Sure, we can be certain that if we wait long enough, clouds will clear and winds will blow. But that's irrelevant if we need power at times when wind and solar are not producing. What do we do then? You suggest batteries, but that's also disingenuous:

Batteries allow people to store the generated electricity for use at night or in less-than-favorable weather conditions. Unlike oil, renewable energy sources can’t accidentally be spilled or catch fire.

Batteries work if all you require of them is support for emergency lighting and communications. But support for normal loads over extended periods of low wind and solar production? Forget it. The cost of battery storage capacity is 100 times greater than it would need to be to support normal loads over a two-week period of low wind and solar production. And BTW, batteries do catch fire now and then. More frequently, I would guess, than fossil-fueled generators, relative to energy delivered. At least that's true of the lithium-ion technologies used in the most cost-effective grid-scale batteries that are commercially available.

 

Jane Marsh's picture
Thank Jane for the Post!
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