The news that renewable energy provided 82% of all capacity built in the USA in the 1st quarter and that solar supplied 100% of the capacity built during March puts a spotlight on renewable energy. Why is renewable energy booming?
An answer follows from Citi Research and not a renewables booster. It appears in "Shale & Renewables: a symbiotic relationship," an 88-page Citi Research report authored in September 2012 that I recommend.
https://ir.citi.com/586mD%2BJRxPXd2OOZC6jt0ZhijqcxXiPTw4Ha0Q9dAjUW0gFnCIUTTA%3D%3D
"Solar is already cheaper than domestic electricity tariffs in many parts of the world, with many other regions to follow in the next few years. While wind has a tougher task competing with lower wholesale prices, it is also competitive in growing number of regions. Renewable technologies can already compete against CCGTs in higher-priced (non-shale-blessed) regions, and rapidly falling cost curves imply parity even vs. cheap 'shale electricity' in windy and sunny regions before 2020." See pages 2 and 5 as well as Figures 6, 7, 8 and 9.
Citi calculates that wind power (without subsidies) is competitive with natural gas today, if gas costs $6 per thousand cubic feet. In most parts of the world, gas costs right now considerably more than $6 per thousand cubic feet. See Figure 8.
Citi even more stunningly finds that solar today competes with a wholesale power from a CCGT in the sunniest regions where gas costs $12 per thousand cubic feet. See Figure 9. Again this is comparing a solar farm feeding into the grid, with a gas-fired power plant doing the same. It is not comparing solar at the premises of an electricity customer, where solar is competing against the fully bundled retail price of electricity that includes generation, transmission, and distribution costs.
Citi moreover finds that solar in the sunniest regions will be competitive by 2020 with gas at just $5 per thousand cubic feet. Why? The price of solar continues to hurtle lower.
Will gas cost $5 per thousand cubic feet in 2020? With gas reaching $4.15 this week in the spot market, it might do that even this year.
Were I a PA resident, I might, might vote against you as a candidate in order to insure your time goes to this excellent blog.
ReplyDelete