renewable energy Archives - the patient investor

April 7, 2017

Record amount of renewable energy capacity added in 2016 | DW.COM

Global renewable energy capacity jumped eight percent last year despite a 23 percent drop in investment. Falling renewable energy prices are driving a build-up of capacity.

The world added a record amount of renewable energy in 2016 despite a sharp drop in investment, the UN said Thursday, largely due to falling costs of clean energy.

New renewable energy, excluding large hydro projects, added 138.5 gigawatts of power in 2016, up eight percent from the previous year. The new capacity came despite investment falling to $241.6 billion (227 billion euro), 23 percent lower than the previous year and the lowest since 2013.

….Not all the drop in investment was due to reduced costs, with China, Japan and some emerging markets cutting renewable investments. China’s investment in renewables dropped 32 percent to $78.3 billion, the first time in a decade it bucked a rising trend. Japan’s investment tumbled 56 percent.

What is encouraging is the 29% reduction in cost per KWh of renewable energy.

Levelized Cost
A 2014 study by Lazard, an international financial advisory and asset management firm, shows onshore wind has the lowest average levelized cost at $59 per megawatt-hour, and utility-scale photovoltaic plants weren’t far behind at $79. By comparison, the lowest cost conventional technologies were gas combined cycle technologies, averaging $74 per megawatt-hour, and coal plants, averaging $109. These numbers are the average of low- and high-end estimates….

Levelized Energy Costs

Wind and solar costs falling
The levelized cost of some wind and solar technologies has plummeted in recent years. The graphic below shows that the average cost of onshore wind has fallen from $135 per megawatt-hour in 2009 to $59 in 2014. That’s a 56 percent drop in five years. The cost of utility-scale photovoltaic technology has plunged from $359 per megawatt-hour in 2009 to $79 in 2014, a 78 percent decline. [source: Energy Innovation]

Lazard: Solar & Wind Energy Costs

The cost of large-scale solar continues to fall rapidly. In August 2016, Chile announced a new record low contract price to provide solar power for $29.10 per megawatt-hour (MWh). In September 2016, Abu Dhabi announced a new record breaking bid price, promising to provide solar power for $24.2 per megawatt-hour (MWh). [source: Wikipedia]

Wind prices are also falling. In 2016 the Norwegian Wind Energy Association (NORWEA) estimated the LCoE of a typical Norwegian wind farm at 44 €/MWh, assuming a weighted average cost of capital of 8% and an annual 3,500 full load hours, i.e. a capacity factor of 40%. NORWEA went on to estimate the LCoE of the 1 GW Fosen Vind onshore wind farm which is expected to be operational by 2020 to be as low as 35 €/MWh to 40 €/MWh. Offshore wind prices are also falling. In November 2016, Vattenfall won a tender to develop the Kriegers Flak windpark in the Baltic Sea for 49,9 €/MWh. [source: Wikipedia]

The IEA says “The share of renewable energy in total final energy consumption climbed to 18.3%, continuing the slight acceleration of trends evident since 2010. However, progress is nowhere near fast enough to double its share to 36% in 2030. As highlighted in IEA’s World Energy Outlook 2016, the challenge is to increase reliance on renewable energy in the heat and transport sectors, which account for the bulk of global energy consumption.”

Source: UN: Record amount of renewable energy capacity added in 2016 | News | DW.COM | 07.04.2017

October 27, 2014

Solar Struggles To Compete With Other Renewables On Cost

Andy Tully discusses a study by Ecofys, a renewable energy consultancy based in Utrecht, Netherlands:

…..The Ecofys study concludes that new coal and natural gas plants in the EU, running at maximum capacity, have levelized costs of just over $64 in 2012 dollars per megawatt-hour. Onshore wind costs about $102 per megawatt-hour.

On the higher end, the Ecofys says, nuclear power costs about $115 per megawatt-hour and solar photovoltaic systems cost about $127. At the low end, the cost of hydroelectric power costs about $12.

October 7, 2013

Pumped hydro energy storage – making better use of wind

Electricity system operators and investors could use pumped hydro energy storage to complement the growing deployment of renewable energy. The current grid struggles to push power through when it is being generated in large quantities, and to meet demand when generation is low. Storing energy from wind using pumped hydro means the electricity wouldn’t have to be sold as it is being made, but could be saved for later.

December 15, 2011

Sun-Powered Schools Save $30M

Hawaii Pacific Solar will install solar panels at [15 Kauai schools in Hawaii] at no cost to the state. The department will buy electricity generated by the panels from Hawaii Pacific Solar [at] a rate of about 16.9 cents per kilowatt hour. The rate will rise to 28 cents an hour over the course of the 20-year contract.

…….The department will save an estimated $30 million over the life of the project, Abercrombie’s office said. The forecast assumes commercial electricity rates will increase an average of 3 percent per year.

via Sun-Powered Schools Save $30M.

Comment: ~ According to the EIA, average US retail price for electricity was 12.17 cents per kWh in August 2011 while industrial usage averaged 7.47 cents per kWh and commercial 10.83 cents per kWh. Prices increased on average by 1.3 percent from August 2010.

Rates vary from 20 to 45 cents per kilowatt hour on the islands, according to Hawaiian Electric Company (HECO). They explain:

“The cost of electricity in Hawaii is higher than on the U.S. mainland for a number of reasons. In Hawaii the electrical systems on each island are independent. Because there are no neighboring utility companies from which to draw power in the event of a problem, we must have reserve generating capacity and multiple distribution routes. This increased infrastructure is paid for by a small population.

Additionally, our use of oil to produce electricity drives up costs. Mainland states primarily use lower-cost resources that aren’t readily available here. To reduce Hawaii’s use of oil, protect our environment, and improve energy security, we are committed to significantly increasing our use of renewable energy resources.”

So the solar solution is only relevant to Hawaii because of high local electricity costs. It would only be viable for mainland (commercial) use if solar electricity charges could be reduced by 36 percent. And it would be a brave man/woman who commits to a 20-year escalation at 2.5 percent.

Renewable energy sources remain on the fringe, contributing less than 4.9 percent of the national total if we exclude hydroelectric power. Other Energy Sources comprises biomass, geothermal, solar, wind and other miscellaneous energy sources:

US Energy Sources