The price for electricity is indeed very high in Germany, rising to new heights with the new year, again.
The problem is, unsurprisingly, regulation and policy, i.e. the fees you already mentioned, and the subsidies for industrial usage, etc.
So, yes, it actually seems that the NYT is misleading here.
Let's leave this as an exercise for the reader, to judge if anyone should really be surprised here.
I always think of this old "Trust, but verify" quibble, and that it is actually based on an old Russian proverb. The irony.. :)
It's not only very high, but the second highest in the world, and we are about to take over the first spot [1]
> The problem is, unsurprisingly, regulation and policy, i.e. the fees you already mentioned, and the subsidies for industrial usage, etc.
The problem are the subsidies for all the green energy. It's not only the direct costs but also the costs for grid interventions (turning on/off capacity), paying for renewables even if they are not producing because there is too much energy available, the huge requirements for new energy lanes from north to south, getting rid of nuclear power etc.
Subsidies for industrial usage is often quoted as increasing the costs by interested parties, but it's also a direct need of the Energiewende, because the economic damage would be gigantic. Unless you want to get the energy intensive factories out of your country, you have to factor in those costs.
> So, yes, it actually seems that the NYT is misleading here.
Yes, as does most media - especially in Germany. Those negative prices are no win for any german. Why else is it, that we will soon pay the highest prices for electricity in the world?
[1] http://www.sueddeutsche.de/wirtschaft/energiekosten-in-oecd-...
> Yes, as does most media - especially in Germany. Those negative prices are no win for any german. Why else is it, that we will soon pay the highest prices for electricity in the world?
AFAIU, it's because you're aggressively shaping the energy market in order to reduce health and environmental costs now.
The technical issue here is that batteries are not good enough yet; and [hemp] supercapacitors are not yet at the volume needed to lower the costs. So, maintaining a high price for energy keeps the market competitive for renewables which have positive negative externalities.
This has lots of positive market based effects e.g. people can invest in energy efficiency and be rewarded in terms of monetary savings.
Unfortunately, most of these claims are either completely false, or come with huge caveats. The reality is that with upfront costs included, most renewable energy today is significantly more expensive to produce than traditional forms of energy. No amount of clever journalism will change that.
As I understand it, the real problem is two-fold. Firstly, wind isn't reliable, and if you have too much wind power feeding into your electrical grid but don't have enough storage, the entire grid becomes unreliable. Secondly, wind turbines cost about the same whether they're producing power or not, meaning that they're always feeding power into the grid if the market price is above zero. This takes money away from more reliable power sources - coal, gas, hydro, storage - and can drive them out of business.
That's a more complicated problem than "NYT is a left-wing conspiracy", and it's harder to solve.
That's not quite the accusation and while you will likely disagree with the observation, I'd hope for a more fair representation of it.
For those of us across the political aisle (so to speak), the issue with the NYT is that they slant away from conclusions or present a muddled set of facts to discourage reaching a clear conclusion when it would contradict what would be a commonly accepted truth on the left. Or to frame it differently, when there is a narrative violation, the conclusion becomes whispered or is turned upside down. But when there is no narrative violation, then all is clear.
Just as one (justifiably!) rolls one's eyes at a certain network's claim of "Fair and balanced", some of us also roll our eyes at the old grey lady and her "newspaper of record" aura. Not as often, but it is a problem for the NYT too.
This seems like something a futures market should be able to cover?
Ie there are consumers that need reliable power, and there are reliable power sources. They should be able to come to an agreement, despite cheap but unreliable spot sources in the market?
The trouble is that you can’t just plug a “reliable power plant” in or off the grid. It takes hours (that’s “quick” here) or days to power on/off.
You need batteries to cope (e.g. hydro power plants) and there’s not enough of them now.
A quick Google search for 'electricity futures' reveals quite a few hits. So this is already a thing.
Please cite your credible source saying that wind energy is currently profitable in practice without subsidies in more than a tiny fraction of areas on earth.
Wind energy is not viable everywhere, but in places with no NIMBY concerns, lots of rural land, and lots of wind, wind energy is perfect. Much of the US plains (especially the closer you get to the Rockies) fits this category for instance. Iowa, not exactly a mecca of environmentalism, is 35% powered by wind now; this is estimated to rise to 40% by 2020. (https://en.wikipedia.org/wiki/Wind_power_in_Iowa)
A quick google for "unsubsidized wind power profitability" turned up a bunch of interesting things, though I didn't delve too deeply into any of them.
Am I (along with the rest of the world, who would be dancing in the streets, dedicating trillions of dollars to deploying wind towers in every corner of the earth at this very moment, and writing thousands of credible articles about how the world’s energy problems have been solved if this were true) missing something?
Edit: the green folks are coming in and downvoting these comments like crazy. Could one of you please justify your downvote by replying with a link to a credible article that shows wind energy to be profitable without subsidies in non-exceptional places? I think everyone would love to see it, including myself! Google doesn’t seem to know about this very special, world-changing article. Perhaps it is protected with an overly aggressive robots.txt.
[1] https://www.dallasnews.com/business/energy/2017/10/13/texas-...
Economically competitive wind power would be an earth shattering development. If it exists, there would be articles about it everywhere. Everyone on HN would be getting jobs at wind farm startups, and trillions of investment would be pouring in. Venture capitalists would be walking the streets to find wind farm entrepreneurs that have hidden their contact info because of the overwhelming number of term sheets being thrown at them. Bakeries throughout the Valley would be offering turbine-shaped gluten-free cupcakes to VC’s, who would include them with their hand-delivered term sheets in hopes that theirs gets a little bit of extra attention from picky entrepreneurs.
I want it to exist too, I just see no evidence that it does.
Renewable energy has a lot less external costs, i.e. negative effects such as global warming, pollution, etc. On a national or global scale, these costs should be accounted for in any study comparing economical competitiveness. Just looking at the balance sheets of energy companies and their costs vs. income is a bit short-sighted.
If it’s unprofitable it needs to be subsidised. That’s not bad per se. But you can’t run around arguing it’s profitable when it doesn’t appear to be.
"We therefore note that wind is now cost competitive with new coal-based generation capacity."
“Over the past 12 months, across key wind states, except Karnataka, the wind tariff has been raised
...
Generation Based Incentive (GBI) restored: In its FY2014 (April 2013-March 2014) budget the GoI reintroduced GBI for wind power.
...
During the past 12 months, we have seen various states announcing their wind and/or solar installation targets (refer to table 3).
...
The GoI has committed to providing low interest- bearing funds from the National Clean Energy Fund (NCEF) for five years to the Indian Renewable Energy Development Agency (IREDA), the nodal agency providing debt finance to renewable projects in India.“
[1] https://natgrp.files.wordpress.com/2013/07/india-renewables-...
[1] http://www.faz.net/aktuell/wirtschaft/technikwissenschaften-...
I know this isn't a satisfying answer, but hopefully the changes in the EU will provide a real-life example before too long.
> Wind has been profitable for years and years even without government handouts
which does not match with
> Unfortunately, I can't give you my source, as it's from a friend who worked at one of the turbine manufacturers
I'd say you wouldn't have to rely on an unnamable source if it were profitable for years.
i'm not aware of any left-leaning readers who want renewables to succeed because of their lower costs. the point is to reduce environmental impact and externalities that the fossil fuel industry simply chooses to ignore. even if the burden of upfront cost must be borne by taxpayers, it's no different than simply taking into account all factors of power generation using existing infrastructure and methods.
But that doesn't change the fact that if we don't transition to renewable energy, we will wreck the planet, at least wrt humans surviving on it. The cost doesn't really matter when you consider that aspect.
1) We still haven't solved the nuclear waste disposal issue.
2) Even if fears around #1 are overblown, "if we wanted to" is the rub: there's very little political or public will to move any meaningful amount of energy production to nuclear, and in some places in the world, countries are actually retiring nuclear plants as the age and replacing them with something else.
The cost of renewables will certainly go down as scale increases; there's no evidence that there's anything special about renewables that would cause them to behave contrary to expectation there. Will fully-renewable energy generation ever be cheaper than the mess we had in the mid 1900s? Maybe, with technology that doesn't already exist, but otherwise maybe not. But that's ok. Paying more for power is better than destroying the planet and being dead.
This statement - 'I'd rather pay more for electricity than die on an uninhabitable planet.' is in question.
Who wouldn't do that?? If it was as simple as that - logic would dictate that is the only valid option!
Unfortunately in the world of facts there is only incidental and anecdotal evidence that paying more for electricity would have even a small effect on the habitability of our planet.
To summarize - while it is possible to suggest it may have a positive impact; it is a huge leap to state this as fact in any way (and the largest disagreement I have personally).
To turn your logic on its head - if you believe this then maybe you would let me re-sell you your local electricity at 2x or 3x the price?
Huh? You're not really making sense here, and that's not what I've said. I'm not saying that the simple act of paying more for electricity will solve our climate-change problem. I'm merely stating that continuing to use non-renewable, polluting means of energy production is wrecking the planet.
If renewable energy is one thing we need to adopt to slow/stop/reverse that trend (available literature seems to point in that direction), and renewable energy is more expensive (as some people here are claiming), then I'm ok taking that hit.
> To turn your logic on its head - if you believe this then maybe you would let me re-sell you your local electricity at 2x or 3x the price?
That is a complete non-sequitur and has nothing to do with my position or the discussion at hand.
Oh and that’s not my idea, it’s someone else’s ;)
Since price is a signal, I would not simply charge 2-3x more for local electricity, but instead switch to 30m charge windows for end customers. Prices change every 30m, and the consumers (or rather, their smart homes) decide whether to charge that Tesla right now, or wait until price goes down. Consumers will buy batteries to store electricity when it’s cheaper, giving an incentive to buy solar panels to match.
I’m glad you don’t have a downvote button, because having a conversation is so much more productive.
EDIT: Added paragraph before last.
I know people who follow the spot electricity price and choose to warm up their wood stove when it makes economical sense.
That, of course, is worse for the environment but luckily unlikely to catch any wider usage.
This is not immediately obvious to me. Care to elaborate?
The less efficient than gas for combustion means an increase of soot and smoke. The soot leads to a reduction of albedo and an increase of heat capture in the environment.
While not always the case, many times, the design of the heating system for wood often has a significant portion of the heat escape the house (compared to a forced air gas furnace). This again reduces the overall efficiency of the system compared to other options.
With both gas and wood it is often the case that this is a whole house solution - not just heating the current room the person is in. There are many approaches to heating the person rather than heating the room (or house). I found http://www.lowtechmagazine.com/2015/02/heating-people-not-sp... is an interesting read - the chairs and beds of old make a bit more sense in their design.
I think you have it somewhat backwards: the ordinary expectation would be increased per-unit costs with increased scale; but renewables are special because they are a hot technology field, so we are likely to see per-unit cost reductions as technology improves.
The reason that per-unit costs typically rise with scale (as illustrated with an upward-sloping supply curve) is because inputs become more scarce. For instance, the best wind and hydro locations are already taken, so new locations will be slightly worse, leading to higher production costs.
"Economies of scale" are an exception early in the supply curve where it slopes downward (due to better utilization of capital, etc.). We are probably past that point because the scale is already quite high, so the supply curve for a given product using a given process is probably upward-sloping, and there are no more economies of scale to be had.
The higher scales will finance technology improvements (in processes and products) so I agree with your overall point that prices will drop. But the reason for the price drop is technology (the R&D for which may be financed by the higher scale) not the scale itself.
I believe this distinction is important because it means we need to watch the R&D budgets, not the scale. R&D budgets will be flush when firms see a lot of improvements to be had, and will dry up when they don't see much more (even if scale remains high).
I agree with you that once we run out of viable locations to put our renewable infra, it'll become more expensive, but I think you vastly underestimate the amount of space we have for that sort of thing.
It mentions high cost of electricity, and that it's due to fees and "renewable investment costs" but then immediately hand-waves that away because "household energy bills have been rising over all anyway."
When combined with your information above (those hand-wavy fees actually account for fully 50% of the costs, with 24% being the renewables surcharge) it would seem that the NYT is being misleading. It seems they want to convey the idea that the renewables are an immediate good thing for everyone (which I do not take issue with politically) while downplaying the significant costs to consumers. Am I missing something?
If I'm not, then this does nothing but contribute to the current view of American media as being intentionally misleading when it suits their interests.