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Four Must-See Charts Show Why Renewable Energy Is Disruptive – In A Good Way

By Ryan Koronowski

"Four Must-See Charts Show Why Renewable Energy Is Disruptive – In A Good Way"


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A common refrain, from skeptics to allies alike, is that renewable energy is a great idea, but not feasible because oil, gas, and coal will always be cheaper. Leaving aside the fact that fossil fuels are a finite resource and are the primary driver behind a warming planet, is it really true that renewable energy is more expensive?

Brian McConnell made a graph that shows what has happened to the price of energy (in gigajoules) since 1980 for solar power, natural gas, crude oil, and then residential electricity.

In his words:

The graph above compares the price history of solar energy to conventional energy sources. This is what a disruptive technology looks like. While conventional energy prices remained pretty flat in inflation adjusted terms, the cost of solar is dropping,fast, and is likely to continue doing so as technology and manufacturing processes improve.

That green line drops steadily. Though it represents a very tiny proportion of the total energy mix, as it gets cheaper and cheaper we can expect that to change. Disruptively. One thing McConnell said he would like to update is prices for coal, which would be interesting.

In an update, he noted that while joules are a good leveling metric, one thing they do not capture is the fact that many of those joules of fossil fuel energy are burned as waste heat, increasing the price. Solar placed in less sunny places than the American South would also increase the price.

His graph is backed up by the pros. In Bloomberg New Energy Finance’s presentation (pdf) to the Clean Energy Ministerial last month, this slide shows that solar panel prices fell 80 percent in the last 5 years:

It’s not just solar. This one shows the steady decline in wind turbine prices – 29 percent since 2008:

The skeptic might say “that’s all well and good, but storage technology is not feasible and what exists today is far too expensive — some cars will always need gasoline.” Not so: lithium-ion battery costs dropped 40 percent in the last three years:

(HT CleanTechnica)

Again: there is one kind of energy that gets more expensive the more it is used, and one kind that gets less expensive the more it is used.

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28 Responses to Four Must-See Charts Show Why Renewable Energy Is Disruptive – In A Good Way

  1. Jay Alt says:

    Here is a storage story that’s been growing for years. It is getting press now in Germany (VW-Audi, central government) & W Europe. Called P2G (Power-to-Grid) or sometimes W2G (Wind-to-Grid) it is an idea to store excess wind (or solar) energy, through electrolysis, as various fuels. Numerous links at the end.

    An 11 firm consortium is forming:
    Participation in North Sea Power-to-Gas Platform

    • Paul Klinkman says:

      I had to dig for the meaning of “power to gas”. They mean electricity to hydrogen gas, a giant fuel cell.

      Fuel cell technology was used in the Apollo spacecraft. The movie “Apollo 13″ was about a fuel cell explosion aboard the spacecraft that nearly killed three astronauts, so it’s not a perfect technology. Still, on earth, especially for a large power plant at a fixed location away from people, it’s probably not a bad technology for power storage. It can store a huge amount of power if you have a huge hydrogen tank, and it can store the power pretty much forever until your city really needs peak power generation.

      Its biggest competitor is pumped hydro, where water is pumped uphill to a reservoir during off-peak hours and let down through turbines during peak hours. Pumped hydro takes up land.

      Solar/wind needs storage to take over 99% of the energy market.

      • mulp says:

        Nuclear needed storage to take over the market, plus big subsidies, but natural gas has been cheaper for decades after being way too expensive in the 70s driving big investment in coal power for electric.

        Why does nuclear require storage? All the power from nuclear must be used to keep the reactor cool unless you waste the massive capital cost of the plant by varying the nuclear reactor output daily. Up in the morning, down at night, so it has an average utilization of ~70% instead of ~90% which means a capital cost increase of ~25% per watt. Nuclear needs to produce a steady output at rated power to minimize capital cost per watt.

        Wind and solar produce a varying output which much be completely sold to reduce the capital cost per watt.

        Nuclear marginal cost is higher than wind and solar, but still each requires some power type to match output to the load, or the capacity of the capital base of nuclear, wind, solar must exceed all possible demand.

        Or you use natural gas cogen which has the lowest capital costs, lower than coal and lower than hydro, in part because most is installed where heat is required anyway.

        With natural gas supply in excess and thus very low in price, gas cogen eliminates the need for storage. Especially as manufacturing increases in the US – lots of manufacturing needs heat, and buildings need heat (and heat can be used to cool efficiently on commercial building scale).

        And then there is the Bloombox, if gas is cheap enough.

        Old coal power plants get phased out and replaced by wind/solar and gas cogen, and when gas prices rise from increased demand from other sources, that favors speeding investment in wind/solar.

        And utility scale batteries are likely to be molten metal. Once the first get deployed in some high value applications, the investment will increase in startups and production, and the electric market is setup to allow power brokers to buy power cheap at night and sell high during the day.

        • J4Zonian says:

          Coal and especially nuclear require large amounts of water for cooling and mediation, which is not returned unharmed to Nature. Coal, oil, gas and nuclear require areas of land for mines and wells, all of which are not benignly used and returned to natural state but are degraded, often poisoned, along with everyone, human and non-, who lives on or near them. Coal and nuclear especially take almost permanent storage capacity after use, an ever-expanding volume of dangerous stuff. All of these have externalized health costs, still real and paid by the rest of us, we all and especially our descendents pay for the loss of nature from air pollution, radiation leaks, (tritium, eg) etc. None of these costs or requirements are adequately accounted for when comparing renewables to non-. And of course as fossil and nuke fuels get scarcer, farther, deeper, dirtier and poorer (EROEI), the costs of all kinds go up for them.

      • Power-to-gas is not limited to fuel cells. Fraunhofer (a German technology equivalent of the NIS, not some two-bit startup) is working on conversion to methane. You can also blend hydrogen into the natural gas grid, up to 15%.

      • Chris Winter says:

        It’s a minor point, but what exploded on Apollo 13 was an oxygen tank, not a fuel cell per se.

  2. fj says:

    Hi dependency on natural systems with emphasis on human capital tends to be totally positively disruptive since they are many factors undervalued

  3. fj says:

    Hi dependency on monopolies based based on commercial commodities tend to be way overvalued and very expensive; and in the case fossil fuels are a huge financial and energy drain; characterically oxymoronic.

  4. fj says:

    Hi dependency on monopolies based based on commercial commodities tend to be way overvalued and very expensive; and in the case fossil fuels are a huge financial and energy drain.

  5. Brad says:

    THe barrier is not technology or price. THe barrier is entrenched monetary interests in the fossil fuel and utilities industry.

    • Ed Leaver says:

      Price is always a barrier. The challenge is how to surmount it. I suspect wind and solar technologies are not themselves disruptive so much as the way we implement their subsidies.

    • fj says:

      A key business strategy is secure a local monopoly.

      • fj says:

        Net zero transport solutions are a very small fraction of the price of cars.

        Considering infrastructure and all externalities the price differential is astronomical.

      • fj says:

        There are 500 million cyclists in China; about double the number of cars in the US.

        Consider the per capita wealth differential supporting each system; including the externalities.

      • fj says:

        Cost differentials for buildings that are very efficient and design out fossil fuels and those that do not are also very large.

  6. Guy Marsden says:

    Residential scale renewable energy systems have the benefit of making the energy source personal and as prices go down deployment increases. It’s all good!

  7. Douglas Hvistendahl says:

    Search on “annualized geo solar.” In colder regions, waste heat from solar, etc. can be stored seasonally at a reasonable price to help reduce building heating costs.

    • Paul Klinkman says:

      I don’t advise 180 days of heat storage capacity except above the Arctic Circle. Almost everywhere else, solar power is available for a recharge every 3 days at a minimum.

  8. Dave Bradley says:

    The linear portion of the log(Price) vs quantity made only applies for the initial part of the implementation of a technology. After that, it is not a decline but a gentle rise, as things like the cost of bulk electricity and raw materials like steel, aluminum, glass and concrete start adding up. Just look at the price of cars or time.

    PV’s are underpriced right now , and have to rise in price just to get to the break-even point. And paying slave labor wages to Chinese workers to keep silicon based PVs cheap is in no way sustainable. Wind turbine costs have leveled off, and will be doing good to stay constant- especially if the cost of the CO2 pollution associated with steel and concrete manufacturing gets factored in.

    The “free lunch” part of the renewables biz is no longer useful. If the workers making the renewable systems and parts for those cannot afford to buy the electricity made by them becuase their wages are so depressed, or the renewables systems have to be so heavily subsidized that it’s a choise between funding Kindergarden or subsidies for PV, maybe it’s time to re-evaluate the “cheapness” idea. The workers and installers have to be able to earn enough to at least be classified as poor to make PV happen. And besides the economic point about expensive electricity like PV is to make efficiency and lack of energy consumption more incentivized. On an economic level, PVs are an excuse to employ people, and it sure beats employing them in Oil Wars or in the Prison-Industrial complex, which are also go with cheap wages and a society with a small percent of those with most of the money and the vast majority who work hard and don’t have mch to show for it. Or a society built on merely installing stuff made elsewhere, but which tends to make nothing but knowledge of really dubious value, like “financial products” and Austerity.

    Or is that too much to ask of overrpaid economists and promotionalists who never seem to get a cut in their wages….

    • Superman1 says:

      Speaking of ‘free lunches’, suppose part of the cost computations for competing technologies was the requirement for essentially zero impact on the biosphere. Fossil would go through the roof, as what happened in part to nuclear when the nuclear waste rules were toughened a bit. We don’t want to do the subsidy-free full fuel cycle costs because no one wants to face what energy would really cost, and how we would have to cut back on our usage to afford it.

      • SecularAnimist says:

        Superman1 wrote: “… how we would have to cut back on our usage to afford it.”

        According to Lawrence Livermore National Laboratory, “more than half (58%) of the total energy produced in the US is wasted due to inefficiencies, such as waste heat from power plants, vehicles, and light bulbs”.

        We could cut US energy consumption IN HALF with NO loss of utility or services to end-users, simply by eliminating waste through efficiency improvements.

        • Superman1 says:

          The last paragraph of the link states: “Although there is vast room for improvement, if the US can employ a combination of decreasing consumption, increasing efficiency, and increasing the role of renewable energy sources, hopefully we’ll continue heading in the right direction. I agree in general, but it needs to go much further.

          • Superman1 says:

            There are two major types of waste: waste associated with the goal/mission, and waste associated with the approach. They differ in timing, cost, and difficulty. The goal is to minimize the product of mission waste and approach waste: perform only the essential missions, and do them efficiently.

          • Superman1 says:

            Mission waste is the low-hanging fruit; it can be done cheaply, easily, and on a short time scale. Eliminating vacation travel, a non-essential energy expenditure, is an example. Approach waste, the focus of the linked article, requires at a minimum some implementation time, and usually some R&D as well. It is more complex and more expensive. While both should be pursued in parallel, because of the time urgency of the climate change problem, mission waste needs to be addressed as quickly as possible.

          • Superman1 says:

            Unfortunately, a substantial portion of our economy revolves around mission waste, and eliminating this major component of waste will severely depress the economy. For obvious reasons, the Livermore article does not address this.

          • Superman1 says:

            My submitted message defining mission waste and approach waste precedes the previous two messages.

    • Timothy Hughbanks says:

      Cars are not a good example. In late 1996, I paid ~ $14K for a 1997 Honda Civic (which, btw, I still own and drive). Today, you can get one for less than $20K – about the same as the inflation-adjusted price. The 2013 Civic is a much better car in terms of amenities, trim level, power and to a small extent, mileage.

  9. Tony says:

    Another common refrain is, “can renewables power our current society – including the build up of renewable energy infrastructure?” This article certainly doesn’t address that. Yes, lower prices will eventually lead to greater uptake but when will that uptake reach other limits? All renewable energy infrastructure takes non-renewable resources. Current societies require growth – so energy systems have to grow to accommodate that (even with efficiencies). In nature, you can’t do just one thing – what is the environmental impact of renewable energy systems and what is the point when the negative effects outweigh the positive impacts? There has been little research into this last question but what research there has been suggest that there are limits to what renewables can achieve.

    Of course, continuing to power our current societies will continue to cause environmental degradation (of varying degrees) no matter what the energy source, so cost projections are only a tiny part of the big picture about our way of life.