A transformation is happening in global energy markets that's worth noting as 2016 comes to an end: Solar power, for the first time, is becoming the cheapest form of new electricity.
This has happened in isolated projects in the past: an especially competitive auction in the Middle East, for example, resulting in record-cheap solar costs. But now unsubsidized solar is beginning to outcompete coal and natural gas on a larger scale, and notably, new solar projects in emerging markets are costing less to build than wind projects, according to fresh data from Bloomberg New Energy Finance.
The chart below shows the average cost of new wind and solar from 58 emerging-market economies, including China, India, and Brazil. While solar was bound to fall below wind eventually, given its steeper price declines, few predicted it would happen this soon.
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"Renewables are robustly entering the era of undercutting" fossil fuel prices, BNEF chairman Michael Liebreich said in a note to clients this week.
Will we see a sharp pivot in energy production, or a gradual tailing off of fossil fuels as renewables take hold?
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Solar — it's not just a clean power source producing zero emissions and almost no local water impact, it's also now one of the best choices on the basis of how much energy you get back for your investment. And with climate change impacts rising, solar's further potential to take some of the edge off the harm that's coming down the pipe makes speeding its adoption a clear no-brainer.
In 2016, according a trends analysis based on this report by the Royal Society of London, the energy return on energy investment (EROEI) for oil appears to have fallen below a ratio of 15 to 1 globally. In places like the United States, where extraction efforts increasingly rely on unconventional techniques like fracking, that EROEI has fallen to 10 or 11 to 1 or lower.
Meanwhile, according to a new study by the Imperial College of London, solar energy's return on investment ratio as of 2015 was 14 to 1 and rising. What this means is that a global energy return on investment inflection point between oil and solar was likely reached at some time during the present year.
(Score: 2) by JoeMerchant on Saturday December 17 2016, @03:41PM
The transition will be very gradual, large energy companies are going to require time to recoup their investments in current technologies before transitioning to whatever comes next. Ramping up production, installation and maintenance of "cheap solar" will also take massive investment and retraining. Retraining legislators to subsidize existing power brokers in the new technologies might take the longest of all.
Think decades - more decades than you can count on one hand.
🌻🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Saturday December 17 2016, @03:53PM
In order to make solar (and other renewables) work, we are going to need to upgrade the national grid. [vox.com] Basically the bigger the grid, the less need for batteries. Because when the sun sets on the east coast, its still shining on the west coast and when its night everywhere there is still wind in middle america and off-shore. A beefed up grid isn't 100% sufficient to enable a full transition to renewable energy but it is infrastructure that we already understand, can start working on now and would be useful today too.
(Score: 2) by Whoever on Saturday December 17 2016, @04:48PM
You can discount any article that starts with a falsehood:
The US doesn't have a national grid, that part is true. But it does have 3 grids: Western, Eastern and Texas.
(Score: 0) by Anonymous Coward on Saturday December 17 2016, @05:18PM
One grid is not a patchwork. And surely adding one more grid doesn't make a patchwork from a non-patchwork...
Somebody get Eubulides!
(Score: 2) by Wootery on Sunday December 18 2016, @05:10PM
Sure, the continuum fallacy is a thing. So what?
(Score: 0) by Anonymous Coward on Saturday December 17 2016, @06:26PM
What falsehood?
You agreed with the quote. Dumbass.
(Score: 1) by Francis on Saturday December 17 2016, @06:18PM
That's blatantly untrue. The reason for the batteries is that load isn't consistent throughout the day. Solar is only useful during the day, so you have to either use the electricity then or save it in some fashion. Similar wind works at night, but it isn't necessarily consistent through the day either, so you need some method of storing that as well.
There are forms of power generation that are more consistent, such as nuclear, geothermal, hydroelectric, coal and gas powered plants, but most of those are ones that we're trying to get rid of by increasing our solar capacity.
Bottom line here is that regardless of configuration, you'll wind up having to either store solar power or replace it with something during periods where the sun isn't shining. You might be able to reduce it a little bit by shipping it from coast to coast, but realistically, that's not viable and since most of the demand is on the coasts anyways, you're not really going to have much gains like that.
(Score: -1, Offtopic) by Anonymous Coward on Saturday December 17 2016, @06:29PM
> That's blatantly untrue.
You are blatantly illiterate. You didn't even read my post much less the linked article.
I never said good grid eliminates storage. I said it reduces the need for it.
Geezus WTF is wrong with people today?
(Score: 0) by Anonymous Coward on Saturday December 17 2016, @08:22PM
I read your post, I didn't bother to read the link because your post was so woefully incorrect. If you can't bother making a point in the post, then why should anybody bother reading the link?
(Score: 0) by Anonymous Coward on Saturday December 17 2016, @11:11PM
Geezus WTF is wrong with people today?
He is Francis!! Doesn't matter what day it is.
(Score: 0) by Anonymous Coward on Saturday December 17 2016, @04:27PM
It's happening faster than you think, particularly in the sun belt including Texas [247wallst.com].
(Score: 2) by Thexalon on Saturday December 17 2016, @06:32PM
Why is it the business of public policy whether the energy companies recoup their investments? If you decide to invest heavily in buggy whips right about the same time these new-fangled "automobiles" are being invented and perfected, you deserve to take a loss.
The next area where solar obviously needs to improve is on battery technology. As an example, right now, my dad's house (and many of his neighbors') has a solar array producing more electricity than he uses, but he still has a grid hookup because the batteries and other equipment needed to go off-grid were much more expensive.
"Think of how stupid the average person is. Then realize half of 'em are stupider than that." - George Carlin
(Score: 1, Insightful) by Anonymous Coward on Saturday December 17 2016, @08:10PM
> Why is it the business of public policy whether the energy companies recoup their investments? If you decide to invest heavily in buggy whips right about the same time these new-fangled "automobiles" are being invented and perfected, you deserve to take a loss.
It's the central tenet of the Too-big-to-fail ideology: capitalism for the poor (don't expect Uncle Sam holding your hand when your house gets foreclosed) and bailouts for the ultra rich when they lose at roulette with your money. Or in other words privatize profits and socialize losses.
It's good to be a banker, if you win you win and if you lose you still win.
(Score: 2) by JoeMerchant on Sunday December 18 2016, @01:35AM
large energy companies are going to require time to recoup their investments in current technologies before transitioning to whatever comes next
Why is it the business of public policy whether the energy companies recoup their investments?
I'm sorry, perhaps you weren't a refugee of the 9-11 war's economic upheaval. My 7 month pregnant wife, 2 year old son and I were basically forced to move over 1000 miles to find a decent job after investment capital "reoriented" itself in the wake of the terror attacks. That relocation ended up putting us in W's back yard, next door to NASA in Clear Lake Texas. From that vantage point, it was abundantly clear that public policy is written in large part by the energy companies, particularly public policy as it relates to their profitability. Do you remember any banks that were "too big to fail" in the news lately? Same applies for the companies that "keep America on the move." Some hurricanes wipe out the off-shore refining capability? Oh, that's all right, you can fire up those old refineries on-shore, yes, yes, we know they weren't emissions compliant when they were shut down 20 years ago, and now we're asking them to run at even higher capacity than they were running back then, but, hey, we can't let the gas pumps run dry - those folks that live downwind of the refineries, they've got the best cancer treatment center in the world just there in town (and they're going to need it.)
So, sure, change is coming, but don't expect that change to include any of the big energy players losing their profit stream. Rules, regulations, and reimbursement structures are not natural constructs, they are made by people. In the U.S. they are made by people who can afford the best political connections, and big oil is firmly seated by the head of that table.
🌻🌻🌻 [google.com]
(Score: 1) by khallow on Sunday December 18 2016, @02:06AM
Retraining legislators to subsidize existing power brokers in the new technologies might take the longest of all.
The subsidy argument is ridiculous. It ignores that the primary source of fossil fuel subsidies come from countries that aren't the developed world. There's no point to retraining legislators to stop backing subsidies that don't exist in their country. Second, it ignores that no one compares apples to oranges. It is traditional to toss every sort of subsidy or externality in for fossil fuels and then only consider explicit subsidies for renewable energy.
The transition will be very gradual, large energy companies are going to require time to recoup their investments in current technologies before transitioning to whatever comes next.
Or more agile companies which aggressively embrace the most advantageous renewable energy approaches could simply just blow past the dinosaurs. That won't take so many decades. Here's yet another case for new business creation. My view on this is that if we're really seeing stagnant businesses resorting to grossly inefficient energy production processes, then we have major barriers to entry for new businesses that need to be removed. Blow away those obstructions rather than resigning yourself to a half century or more of snail's pace economics.
(Score: 2) by JoeMerchant on Sunday December 18 2016, @03:03AM
I've worked for agile companies which aggressively embrace new and advantageous approaches, mostly in medical devices, but the principles are the same...
Big companies win in the end. If the small companies get too uppity, they get bought.
I'm all for blowing away the obstructions, but I don't have a blower strong enough to ruffle the toupees.
🌻🌻🌻 [google.com]
(Score: 1) by khallow on Sunday December 18 2016, @06:19AM
Big companies win in the end. If the small companies get too uppity, they get bought.
But that is an ideal exit strategy for the uppity company (particularly, venture capitalists). Unlike most cases where "uppity" gets used, this is a reward not a punishment. And if you reward something, you're going to get more of it.
(Score: 2) by JoeMerchant on Sunday December 18 2016, @05:52PM
Current success rates for small startup ventures on a buyout track seem to be hovering around 5%. The numbers I have gotten back from multiple VCs are something like 1/20 success worth an IPO, 1/10 struggling small business at breakeven, and the remainder flamed out within 1-5 years. This is with $5 to 10M in seed money, and typically a 2nd traunch of another $5 to 10M every couple of years until either success or flameout.
They do it because it works, financially. $500M invested, 19 failures, and one multi billion dollar winner.
It's not the greatest model for people making a career and raising a family.
🌻🌻🌻 [google.com]
(Score: 1) by khallow on Sunday December 18 2016, @06:15PM
It's not the greatest model for people making a career and raising a family.
Far from the worst model though. And a large chance of a big payoff, especially when you try multiple times, is a pretty good incentive.
(Score: 2) by JoeMerchant on Sunday December 18 2016, @11:01PM
I've participated in ~ a half dozen "ground floor opportunities" over the last 25 years. If you enter the situation with $100K+ to invest, no need to draw salary, sure, it's a 20:1 longshot at making maybe a 50x return on your investment money... but, understand that you'll likely also be working to ensure your investment pays off, and if you value your labor at $100K per year, then you're looking at more like a 20:1 longshot at maybe a 10:1 return on your total investment (time+money). Every situation is different, but they all sort of orbit around this common theme.
If, on the other hand, you need a salary, then a startup is a job with crappy benefits and a high liklihood of unemployment within 2-5 years, and you might be lucky to be offered 0.5% of the company if you sign on at the ground floor level as a "Director" or "VP" or whatever title they feel like handing out. By the time the millions of investment capital dilute your initial stake, now you're looking at a 20:1 longshot to capture a 20-50K bonus (the eventual value of that 0.5% stake after cash investor dilution) somewhere 5+ years down the line.
Buyout or IPO, either can net hundreds of millions on exit. The two successful exits I have been associated with (one of each), have both taken unusually long to get from startup to fruition - 2005-2016 for IPO, and 2001-2014 for an ~$85M buyout. So, you might say my odds are 1/3, but the first I entered in 2006, exited in 2008 and didn't net enough from the IPO in 2016 to cover the uncompensated costs of my relocation to the company in 2006. The second I entered in 2013, because it was damn obvious they were going somewhere good, and they were bought out about a year later - I actually netted more there from bonuses and options than I have all the other "ground floor opportunities" put together, a case of being in the right place at the right time.
It's a pretty good incentive system for people who have lots of money to start with... the VCs make more in this small company churn than anyone else - far better than market returns, that's why they do it. And, those 19/20 that fail and turn people on the streets (sometimes with fair warning, often not) - how long are those people unemployed, living on the taxpayers' social safety net, between jobs? In 25 years, I've only spent 6 months unemployed, an average of about 2 months per flameout - I think I'm doing better than many, I've always managed to get work in my field after the transition. Lots of people end up shuffled into "other opportunities" due to the chaotic nature of the process - not on public assistance, but not earning anywhere near their full potential.
Bottom line, the large chance of a big payoff is for people who already have plenty of money going in. As employers, startups don't offer much opportunity of a "big" payoff if they also pay you a market competitive salary.
🌻🌻🌻 [google.com]
(Score: 1) by khallow on Monday December 19 2016, @09:38AM
(Score: 2) by JoeMerchant on Monday December 19 2016, @04:07PM
The point is that they are generating ROI out of chaos and personal expense of the "more technically competent people" they use.
I suppose it's better than generating profits out of killing people in a war.
🌻🌻🌻 [google.com]
(Score: 1) by khallow on Monday December 19 2016, @11:23PM
The point is that they are generating ROI out of chaos and personal expense of the "more technically competent people" they use.
Plenty of people are up for that. There's a lot of benefits (beyond just money) to go with that "chaos and personal expense". And I'll note as I did at the beginning that we have an approach which is very effective at the sort of rapid changes that you were saying would take half a century or more.
Electricity production and distribution is a peculiar industry with a number of road blocks to change, but it does from time to time experience rapid changes (initial nuclear power adoption, wind power adoption, pollution controls on coal burning plants, etc).
(Score: 2) by JoeMerchant on Tuesday December 20 2016, @12:16AM
Plenty of people are up for that
Yeah, I was. When I was single, and in my 20s. It's pretty shocking how hard it is to transition out of the startup world once you've been in it for 20 years.
There's a lot of benefits (beyond just money) to go with that "chaos and personal expense".
Was just watching Santa Clause 2, applicable quote from the movie: "Oh yeah? Name five."
And I'll note as I did at the beginning that we have an approach which is very effective at the sort of rapid changes that you were saying would take half a century or more.
We have an approach that is very effective at throwing a bunch of stuff at the wall and hoping that some of it sticks. The stuff that gets flung at the wall is mostly only stuff that is perceived as giving its investors the chance of large ROI in a short time frame. An incremental development program that requires $5M in investment capital to improve the efficiency of power transformers by 1%, generating ROI on transformer replacement after 7-10 years, and ultimately saving Billions per year in increased efficiency... nah, ain't nobody got time for that.
The reason I said the changes would take 50 years or more is not because companies like FSLR aren't pushing the envelope on the technology, but because the existing power industry is entrenched. They own enough legislators to keep their interests protected through any broad change in the power generation structure. Florida Power and Light and the "Solar For The PEOPLE" amendments they have been promoting are a great example: legislation written to ensure that solar power doesn't eat into the profitability of the existing utilities. The reason it will take 50 years is because of all the other laws, existing and yet to be passed, that are completely off the public radar, doing the same thing as the FP&L amendments: protecting the industry from disruption.
There are plenty of smart people in the world, any number of which can envision, design, build and prove new power systems that are superior to the existing ones in many ways. They are up against the existing system which knows all too well how to deal with "disruptive" troublemakers like them - it will take something as game-changing as nuclear was in the 1950s to make a rapid change in power generation. CO2 emission, dirty coal and fracking issues all are going to be with us for a long long time if all we've got to go against them is wind and solar.
If somebody develops a $1M 1GW Tokamak, that will turn the industry on its ear. See the movie "The Saint" for what Hollywood (and my Grandfathers) think would be a likely response to such a development.
🌻🌻🌻 [google.com]
(Score: 1) by khallow on Tuesday December 20 2016, @09:06AM
Was just watching Santa Clause 2, applicable quote from the movie: "Oh yeah? Name five."
First, it tends to be a good, long shot gamble. Second, flexible work environment. Third, you get a larger variety of work experience than in a big company and it tends to be higher value. Fourth, you can develop better connections. Fifth, the the stories are better - flashier job titles, more epic successes and failures at your level, more eccentric characters, etc.
(Score: 2) by JoeMerchant on Tuesday December 20 2016, @02:25PM
First, it tends to be a good, long shot gamble.
Agreed, if you just take crackpot ideas off the street you're looking at 1000:1 or worse conversion rates, and no better ROI on the hits. The good VCs tend to get "hits" at a rate of 1/30 or better. Still looks like abject failure from the inside - takes 2-3 years to make a good shot at anything, so you can spend two or three whole careers before participating in a "hit," especially if you join ground-floor every time. The 1/1000 people who are fortunate enough to participate in two hits in a row get the halo title "successful serial entrepreneur." IMHO, that rare title is about as meaningful as being a "top fund manager" for the past X years. They didn't screw up a good thing, twice in a row. Most people who run these startups don't screw up... circumstances make or break more ventures than incompetence. Some successes are partly thanks to VC vetting and management, others are accomplished in spite of it.
Second, flexible work environment.
You would think so, but in my experience the reverse is true. The startup world is full of minimal vacation policies, essentially mandatory long hours, and just as many "traditional" office cultures that demand personal presence 5 days a week, 8+ hours per day. My personal experience in the "big company" world has been much more flexible working conditions.
Third, you get a larger variety of work experience than in a big company and it tends to be higher value.
Yes on the first, I'd say that working in a startup is like a real-world MBA. As for the higher values - my startup salary history mostly paralleled my school-mates who went with the larger company route, within +/- 10% at any given time, basically the same. Both environments favor job-hoppers, periodic renegotiations with new companies can boost compensation much more than any startup/big company contrast.
Fourth, you can develop better connections.
My best, most valuable connections came from the larger companies. I made good friends in the startup world, but they have been mostly impotent in terms of valuable references. The only exception was one of the principal investors, I made a good reputation with him and did get "easy" entry into a couple of flaky jobs in his sphere of influence.
Fifth, the the stories are better - flashier job titles, more epic successes and failures at your level, more eccentric characters, etc.
Depends on what you value in a story. Everyone knows what VP means at a company with less than 10 employees. Plenty of eccentric characters in the big companies, but yeah, the real 3 sigma+ outliers are found in the startup world. And also depends on what you call epic, it's fairly easy to participate in successes/failures at the $10M+ level in a big company... a $2M event can make or break a whole startup company.
🌻🌻🌻 [google.com]
(Score: 4, Funny) by MichaelDavidCrawford on Saturday December 17 2016, @09:01PM
I expect trump to subsidize coal so it can compete with solar.
Yes I Have No Bananas. [gofundme.com]
(Score: 4, Insightful) by ben_white on Saturday December 17 2016, @11:28PM
Will we see a sharp pivot in energy production, or a gradual tailing off of fossil fuels as renewables take hold?
No, what you will see is an organized assault on renewables from new "grass-roots" orgizations who feign concern for birds, wild spaces, etc., and work on getting zoning changes and local and state laws passed to prevent new large scale renewable installations. All funded by the fossil fuel industry. And if you think I'm paranoid, look what they have done to undercut climate science https://en.wikipedia.org/wiki/ExxonMobil_climate_change_controversy [wikipedia.org].
--
cheers, ben
(Score: 1, Interesting) by khallow on Sunday December 18 2016, @05:40AM
And if you think I'm paranoid, look what they have done to undercut climate science
Look at the numbers. They are peanuts, on the order of a low single digit percent of a single quarter's profits for a 20 or so year span ($1.7 billion profit for 2nd quarter of 2016, which was an unusually low profit quarter in recent time compared to perhaps $40 million of alleged climate change denialism for the two decade period in question).
They aren't even trying. Meanwhile the World Wildlife Fund, the largest NGO supporting the current climate change narrative, reported revenue of almost $280 million [forbes.com] for 2015 alone with $48 million in government support. So when one of the Wikipedia links claims that "Exxon has given more than $20 million to organizations supporting climate change denial" in the decade 1997-2007, I can in turn note with the same rhetorical equivalence, "governments of the world have given almost $50 million to a single organization in 2015 which supports climate change alarmism".
The numbers aren't even close. No matter how you pump up the "denial" side, alarmism outspends denialism by at least an order of magnitude. This has the same absurd propaganda characteristics as the recent blaming of the Clinton loss on Russian hacking and fake news. It all reminds me of Emmanuel Goldstein from 1984. He died in some decades-old power struggle yet was blamed for everything that went wrong in totalitarian Oceania. Certain ideologies need scapegoats in order to function. Exxon and the Koch brothers are such scapegoats.
But if you should ever become interested in truth, you'll need to look elsewhere for why climate change rhetoric isn't faring well these days.
(Score: 0) by Anonymous Coward on Sunday December 18 2016, @06:19PM
"When it comes to renewable energy investment, emerging markets have taken the lead over the 35 member nations of the Organization for Economic Cooperation & Development (OECD), spending $154.1 billion in 2015 compared with $153.7 billion by those wealthier countries, BNEF said. "
"emerging markets" (also called 3rd world countries) are mostly located nearer to equator then first world countries so ... there the sun shines.
the "problem", again, is that energy production will be concentrated in the hands of a few.
with oil, gas, coal and even nuclear this makes sense because a lot of investment needs to happen until they break even.
for nuclear there's also the security and safety issue.
so having these energy sources in "a few hands" makes sense.
however the evolution of energy production has created a web of "insiders" and there's a real danger that this
web and structure will be implemented in the renewable energy sector too.
this would mean that a few powerful people will monopolize renewable energy, and unlike as with previous energy sources
won't even have to do anything, you know ... because wind just blows and sun just shines, which is a lot easier
then having to probe and prod for new sources after a well or mine has run dry and barren.
as for the "emerging markets", corruption and cronyism is still the preferred way to do business fast and to catch
up to the first wold countries, even though it gets denied (bureaucracy is a real drag).
thus, these countries will see huge fields of gleaming solar panels next to slum houses that continue to burn
wood and kerosene. the profit of the *free* source will NOT, again, profit all but only a few.
as mentioned before, concentrating the profit (and responsibility) in a few hands for historical energy sources might make sense
but using the same insider web of trustees for energy sources that are accessible for each and every human (sunshine) is a
horrible abomination!
for any person with aspirations to becoming the next revolutionary, i recommend keeping the "gleaming gigantic solar farm-next-to-slum" picture
in memory and also the addresses where the n-th generation of the "energy-barons for eternity" live.