I understand there is installation, maintenance and servicing costs, but shouldn’t the free power from the sun, wind and tidal eventually pay this off and start providing free power?
In: Engineering
Renewables aren’t free; there’s still costs associated with harnessing the energy, even if the energy itself is freely available. Those costs are overwhelmingly related to interest rates on loans, ergo when interest rates go up, costs go up.
Put a different way; thinking renewables should be free is like thinking restaurants should be cheaper. You’re not just paying for the energy/food; you’re paying for the service of supplying the energy/food.
For one, the cost of everything has gone up recently (though it seems to be leveling off now). And “renewable” doesn’t mean “free.” You still have to build and maintain generating facilities. Those might be, but aren’t necessarily cheaper than what they’re replacing (old facility + fuel source).
1. Good ol’ inflation.
2. Renewables still account for a minority of energy generation in first world countries, a significant minority in some areas
3. Solar panels and windmills are not free energy – it takes money to mine the raw materials, transport them for refinement, refine them, transport the raw materials to various factories to be turned into individual components, transported to another factory to be assembled into solar panels, transported to someone that installs solar panels, and then have that person install solar panels. Not to mention the batteries, maintenance, and eventual replacement. It doesn’t matter how much energy these panels provide, someone still needs to pay the thousands and thousands of people that are involved with the supply chain, and for the materials made to use them.
Renewable/green energy isn’t cheaper, which is why it doesn’t get used much in the first place. We should use it because it’s better for the environment and unfortunately have to eat the higher cost.
Two words
‘Price Gouging’
You didn’t think that utility companies would just start lowering their prices immediatly did you?
a) if you’re talking about your own personal power bill, make sure that you’re comparing the actual cost of a single kilowatt hour. many people lately with the extreme weather are complaining about their power bills jumping but it’s because they’re using more power, not because the power itself is necessarily more expensive
b) not all utilities are shifting to renewables at the same rates. Some areas are not near renewables and can’t easily buy that electricity so they’re still heavily reliant on fossil fuels or building out new nuclear. Nuclear, by the way, is ultra expensive to build so while it’s cheap to operate it’s expensive up front
c) it costs money to build renewable energy sources. wind turbines and solar panels aren’t free, and neither is the land they are built on. so, while the energy itself may be cheap or free, you have to pay all the other costs involved–building and paying people to operate it, as well as paying for transmission lines to get the power to the grid
d) a LOT of coal plans shifted to natural gas over the past several years. that along with energy market disruptions due to covid and ukraine drove the price of natural gas through the roof. so, even if a utility is increasing its renewable mix, their fossil fuel prices are probably going up faster than the shift to renewables
“Eventually” is almost always some distant point 25-40 years in the future, as determined by the life of the plant – so over this 25-40 period, a loan was taken out to pay for the design, procurement, construction, installation, maintenance and decomissioning of the plant.
To pay off the loan (and make profit for the company running the plant, if not run by the state), the power generated by that plant is sold instead of given out freely.
We don’t have many renewable plants that are 25 years old and paid off already, and many of the older plants are constantly being upgraded with significantly more efficient solar panels, inverters and better maintenance practices which still make economic sense, so that then adds additional loans to be paid off.
Green energy is cheaper but it’s a relatively small percentage of electricity.
As it grows we likely see it go flat.
People forget inflation comes from individual pieces of the basket and renewables have been falling in price so they will lower inflation.
Also generation is getting cheaper but it’s not all the time so we need more expensive peaker plants or batteries. Batteries have broken through and become a great option recently.
Also transmission is fixed.
One big reason is that we tie the price we pay to usage, but that has to pay for both power generation and transport. As we use less and less power with more efficient technology, we can generate less and less power, but that transportation portion still needs to be paid off to maintain the lines.
So the price per kWh goes up to compensate.
You’re buying your electricity from a profit-making company. By definition, it’s not going to be the cheapest way of doing things.
Also, there is plenty of cost even before profit – maintaining the equipment, the grid, etc. etc. Solar panels degrade, need cleaning, even fail. Batteries degrade and fail even quicker. Wind turbines are literally in gale-force winds for most of their lives, some of them out at see and covered in salty water. Things don’t just carry on working forever, especially with regular checks and maintenance, which cost money. Oh, and tidal is ridiculously underpowered and expensive to maintain for the same reasons.
If you want to get free electricity you can do at least one of those items yourself – solar. You’ll find at that point that deploying solar to your house costs more than you’ll make back unless you live in a very sunny part of the world and even then it takes YEARS to pay back your investment by which time your panels need maintenance, replacement, etc.
I’m aiming to be utility-independent by retirement (20-something years away) because of this, but I will still need to maintain, repair, replace, renew, even buy new things. It won’t be *CHEAPER* than the grid, because the grid works at scale. But it will be *independent* of the grid. I’ll be able to decide how much I spend, when and where and what I don’t need to spend money on.
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