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Gas Plants Will Get Crushed by Wind, Solar by 2035

posted by martyb on Wednesday September 11 2019, @07:31AM   
from the things-prior-to-2038 dept.

DannyB writes:

Gas Plants Will Get Crushed by Wind, Solar by 2035, Study Says

By 2035, it will be more expensive to run 90% of gas plants being proposed in the U.S. than it will be to build new wind and solar farms equipped with storage systems, according to the report Monday from the Rocky Mountain Institute. It will happen so quickly that gas plants now on the drawing boards will become uneconomical before their owners finish paying for them, the study said.

The authors of the study say they analyzed the costs of construction, fuel and anticipated operations for 68 gigawatts of gas plants proposed across the U.S. They compared those costs to building a combination of solar farms, wind plants and battery systems that, together with conservation efforts, could supply the same amount of electricity and keep the grid stable.

As gas plants lose their edge in power markets, the economics of pipelines will suffer, too, RMI said in a separate study Monday. Even lines now in the planning stages could soon be out of the money, the report found.

Hopefully our electrical distribution grid will still work.

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Original Submission

• Re:why not sooner? (Score: 1) by khallow on Wednesday September 11 2019, @12:16PM

  by khallow (3766) on Wednesday September 11 2019, @12:16PM (#892636) Journal

  I see the ignorance in your link right away:

  In the US tax code, a firm investing in a capital project—say a new factory or office computers—typically depreciates the investment costs over the useful life of the capital. In contrast, oil and gas firms expense all or most of their drilling-related expenditures that do not have salvage value, referred to as intangible drilling costs. These typically include geological surveying, wages, fuel, repairs, and supplies associated with well development. As a result, the provision effectively lowers the tax rate on income from such projects relative to capital investments elsewhere in the economy, distorting investment decisions. This has led to inefficiently low investment outside of the oil and gas sector and inefficiently high investment within it.

  They conflate traditional capital investment (which result in hard assets with known value) with non-capital investment. Just because someone drills something doesn't mean capital exists (a hole in the ground need not be an oil-producing hole in the ground). And oil drilling is in line with the regulations on mining and other resource extraction industries. It's not a subsidy, but rather a different way to tax the business due to the vagaries of this sort of industry.
  
  Further, much of the items listed are deducted from taxes of traditional businesses as well, such as wages, fuel, repairs, and supplies associated with the business's activities. Well, that was the entire list except for geological surveying.
  
  Eyeballing the list of alleged subsidies, I count at least half due to this sort of depreciation. Not feeling the concern here, but sure, let's get rid of these subsidies that remain. But keep in mind, I'm also in favor of eliminating the renewable subsidies as well.

  Parent