Renewable Energy costs have fallen to such a level over the past ten years that it now competes, sans subsidies in some locations, against heavily-subsidized fossil fuel power generation, nuclear power generation and hydro-electric dams which receive billions of dollars of subsidies every year.
Many people might be surprised to hear that; It certainly hasn’t been reported by a majority of the mainstream media.
Historically, the reason given for subsidies was to allow new industries to move past the typically turbulent first few years of operation, until they reached a sort of ‘steady-state’ when the business model was fully functional and profits alone could sustain the business, yet the conventional energy industries that have been an important and profitable part of the energy sector are still receiving billions in subsidies annually — while the new kid on the block finds that their much-smaller subsidies are tapering.
Since the first oil wells were struck in Pennsylvania in the late 1890’s, subsidies of one form or another have been an important factor in our primary and secondary energy world.
After the coal price crash in 2014 and the oil price crash of 2016, total volumes of coal and oil deliveries dropped significantly, while the actual subsidy regimes in place for those fuels did not change significantly. Therefore, any perceived subsidy drop must be viewed in the context of lower production which affected the total subsidy amounts received by those industries.
At the same time, many countries that have supported the development of renewable energy have lowered or eliminated their renewable energy subsidies. Germany is an telling example of an early-adopter that discontinued their renewable energy Feed-In Tariffs, while the United States has canceled their lucrative Production Tax Credit for wind energy projects.
And nobody seems to notice! Renewable Energy installations are continuing, the rate of new RE installations is at an all-time high and increasing on a month-to-month basis.
Renewable Energy vs. Conventional Energy
Global Energy Subsidy Totals WEO-2016
The value of subsidies to fossil fuels fell sharply in 2015 to $325 billion, down from almost $500 billion in 2014. Lower fossil-fuel prices were the main reason for the drop, but lower prices have also given additional impetus to pricing reforms in many countries, both fossil fuel importers and exporters. Even with the drop in 2015, the amount going to subsidise fossil fuels is still more than double the $150 billion spent on subsidies to renewable energy.
Renewable energy is the growth story of WEO-2016
In our main scenario, nearly 60% of all new power generation capacity to 2040 comes from renewables and, by 2040, the majority of renewables-based generation is competitive without any subsidies. In a scenario compatible with 2°C, significantly faster growth means that, in the four largest power markets (China, the United States, the European Union and India), variable renewables become the largest source of generation. — International Energy Agency | Fact Sheet: World Energy Outlook 2016
“According to a new report from the U.S. Department of Energy, solar power employs more people than coal, oil and gas combined.
Last year, solar power accounted for 43 percent of the Electric Power Generation sector’s workforce, while fossil fuels combined employed 22 percent. The statistic will be welcomed with open arms by those trying to refute Donald Trump’s assertion that renewable energy projects are bad news for the U.S. economy.
Around 374,000 people were employed in solar energy, according to the report while generation through fossil fuels had a workforce of just over 187,000. The solar boom can be attributed to construction work associated with expanding generation capacity.
The report states that the employment gap is actually growing with net coal generation decreasing 53 percent over the last 10 years.
During the same period of time, electricity generation through gas expanded 33 percent while solar went up by an impressive 5,000 percent.” — Niall McCarthy | Statista
Power to the People!
Conventional energy producers in business for over a century can’t seem to survive without huge subsidy amounts — while Renewable Energy barely topped $150 billion globally, and those RE subsidies are now disappearing.
Nobody forces utility companies to choose renewable energy — subsidies or no subsidies. A solar power growth rate of 5000% over the past 10-years proves that solar, indeed all renewable energy, can compete on any playing field — whether it is a level and fair playing field, or a grossly unfair playing field. It’s just that good.
It’s one more reason why it’s a great time to be a Renewable Energy blogger!
Nuclear reactors are starting to shut down in Europe
It began in earnest in the wake of the Fukushima disaster when Germany inspected its problem-plagued nuclear power plants and decided to take 9 of its nuclear power plants offline in 2011 and the rest offline by 2022.
There is plenty of public support in the country for Germany’s planned nuclear closures, even with the additional fee added to each German electricity bill to pay for nuclear power plant decommissioning, which completes in 2045.
Switzerland likewise has decided to get out of the nuclear power business beginning in 2015 and decommission their nuclear power plants by 2045.
Other European nations are also looking at retiring their nuclear power plants. But the news today is about the UK, Belgium, Germany and Spain.
In the UK, four (French-operated) EDF reactors built in 1983 have been shut down after one of them was found to have a crack in its centre spine. (EDF stands for Electricity de France which is a French utility responsible for managing many nuclear reactors)
At first only the affected unit was taken offline (in June) but upon further inspection it was determined that the other three were at risk to fail in the coming months. Whether or not these four reactors can be repaired economically — all were scheduled to be decommissioned before 2020.
The sudden shortfall in electrical generation due to these unscheduled nuclear power plant shutdowns has been met by 5 GW of new wind power generation, which has seamlessly stepped in to fill demand.
Additional to that, another 5 GW of solar power has been added to the UK grid within the past 5 years. And that’s in cloudy olde England, mates!
In Belgium, 3 out of 5 of their nuclear power plants are offline until December 31, 2014 due to maintenance, sabotage, or terror attacks — depending upon whom you talk to.
Belgium’s Doel 4 reactor experienced a deliberate malfunction last week and workers in the country’s n-plants are henceforth directed to move around inside the plants in pairs.
Further, the utility has advised citizens that hour-long blackouts will commence in October due to a combination of unexpected n-plant shutdowns and higher demand at that time of year.
Belgian energy company Electrabel said its Doel 4 nuclear reactor would stay offline at least until the end of this year after major damage to its turbine, with the cause confirmed as sabotage.
Doel 4 is the youngest of four reactors at the Doel nuclear plant, 20 km north of Antwerp, Belgium’s second-biggest city. The country has three more reactors in Tihange, 25 km southwest of the city of Liege.
Doel 1 and 2, which came on line in 1975, are set to close in 2015. Tihange 1, which also started operation in 1975 and was designed to last 30 years, got a 10-year extension till 2015.
The two closed reactors Doel 3 and Tihange 2 were connected to the grid in 1982 and 1983. Doel 4 and Tihange 3, which came on line in 1985, were operating normally until the closure of Doel 4 last week.
The shutdown of Doel 4’s nearly 1 gigawatt (GW) of electricity generating capacity as well as closures of two other reactors (Doel 3 and Tihange 2) for months because of cracks in steel reactor casings adds up to just over 3 GW of Belgian nuclear capacity that is offline, more than half of the total.
In Britain, EDF Energy, owned by France’s EDF, took three of its nuclear reactors offline for inspection on Monday after finding a defect in a reactor of a similar design. – Reuters
In Germany, the nuclear power generation capacity missing since 2011 has been met by a combination of solar, wind, bio, natural gas, and unfortunately some coal. But that sounds worse than it is.
According to the Fraunhofer Institute, renewable energy produced about 81 TWh, or 31% of the nation’s electricity during the first half of 2014. Solar production is up 28%, wind 19% and biomass 7% over last year.
Meanwhile, with the exception of nuclear energy, all conventional sources are producing less. The output from gas powered plants was half of what it had been in 2010 and brown coal powered plants are producing at a similar level to 2010-2012. – CleanTechnica.com
Let’s see what our friends at the Fraunhofer Institute have to say in their comparison of the first half of 2013 vs. the first half of 2014.
Although unspokenby power company executives operating in Germany, Spain, and some other European countries, the panic felt by traditional power generators is due to the massive changes in ‘their’ market since 2009.
Things move slowly in the utility industry — ten years is seen as a mere eyeblink in time, as the industry changes very little decade over decade. Recent changes must be mind-blowing for European power company executives.
European-union-renewables by Eurostat — Renewable energy statistics. Licensed under Public domain via Wikimedia Commons Keep in mind that this map displays results from 2012. The 2014 map will show significantly more ‘green’ energy, once that map becomes available in 2015.
It occurs to me that the end of the conventional energy stranglehold on Europe parallels the ending of Star Wars VI.
Help me take this mask off
It’s a mask to hide behind when conventional power producers don’t want the facts aired.
Fossil fuel and nuclear power generation have had (and continue to have) huge subsidy regimes in place which they don’t want publicly advertised — and they don’t want renewable energy power producers to have any subsidies. And conventional power producers don’t want fossil fuel externalities and nuclear power externalities advertised either. That’s a lot of hiding, right there.
Externalities are simply another form of subsidy to fossil fuel and nuclear power plant operators and their fuel supply chains, which usually take the form of additional public healthcare spending or environmental spending that is required to mitigate toxic airborne emissions, oil spills, etc.
Spain has ended it’s Feed-in-Tariff scheme for renewable energy, while keeping conventional power producer subsidies in place.
Not only that, suddenly homeowners aren’t allowed to collect power from the Sun or harvest power from the wind unless it is for their own use. Electricity cannot be collected by Spanish residents and then sold to the grid for example, nor to anyone else.
While all of this has been going on, Spain and Portugal have quietly lowered their combined CO2 output by 21.3% (equal to 61.4 million fewer tonnes of CO2 emitted) since 2012, thanks to renewable energy.
But you’ll die
Not only has European renewable energy now stepped up to fill the voids due to nuclear power plant maintenance and sabotage shutdowns, it has scooped incredible market share from conventional power producers.
In January 2014, 91% of the monthly needed Portuguese electricity consumption was generated by renewable sources, although the real figure stands at 78%, as 14% was exported. – Wikipedia
Unwittingly, the German and Spanish power companies have provided the highest possible compliment to the renewable energy industry, and if publicized, it would read something like this;
“We can’t compete with renewable energy that has equal amounts of subsidy. Therefore, remove the renewable energy subsidy while we keep ‘our’ traditional subsidies, until we can reorient our business model – otherwise, we perish!”
Nothing can stop that now
Ending the European renewable energy Feed-in-Tariff schemes will only temporarily slow solar and wind installations as both have reached price-parity in recent months — against still-subsidized conventional power generators.
Even bigger changes are coming to the European electricity grid over the next few years. Nothing can stop that now.
Tell your sister; You were right about me
Conventional power producers in Europe provided secure and reliable power for decades, it was what powered the European postwar success story, but having the electricity grid all to themselves for decades meant that Europe’s utilities became set in their ways and although powerful, were not able to adapt quickly enough to a new kind of energy with zero toxicity and lower per unit cost.
Renewable energy, at first unguided and inexperienced, quickly found a role for itself and is now able to stand on its own feet without subsidies — unlike conventional power generators.
Considering the sheer scale of the energy changes underway in Europe, conventional energy has been superceded by a superior kind of energy and with surprisingly little drama.