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by TheAlchemist
1311 days ago
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I'm sorry I still don't understand why this is the biggest problem now. I get why it's a long term problem - that for sure. But, your comparisons are about building new stuff. My understanding is that the gas / coal capacity is already there - so it's not a question of adding more, right ? So we don't have those fixed costs - they are already paid.
We already have 100% of coverage with those, so adding solar, even without storage, will indeed decrease those variable costs. Economically speaking, if we say solar is cheaper than gas / coal - what's preventing a rational actor from installing more capacity ? Until we get to 100% solar on sunny days, he is sure to sell 100% of his production if it's cheaper gas / coal no ? |
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No, that's generally not how infrastructure is funded. Infrastructure is funded by bonds that are sold and have to be serviced. So the payment for the fixed costs is spread out over time -- ideally over the lifetime of the asset -- and what happens when you add unreliable source that are cheaper -- like solar -- is that they cannibalize the revenue stream used to service the debt and those plants are taken offline right now, or they have to be subsidized somehow by the taxpayer -- which is why regions that make a big push to solar end up paying high energy prices and need to import a lot of energy. They are not paying high energy prices because solar is expensive, but they end up paying high prices to keep their reliable plants online. Or they require subsidies from the taxpayer. California is one example, but you see this often in Europe as well. California just got a billion dollar Federal subsidy to keep diablo online for a few more years, but the reason it was going to go offline was because it needed massive subsidies to remain operational in a market in which it competes with solar. But at the same time, solar can't replace Diablo without blackouts and water shortages - Diablo supplies 10% of California's energy and is used to pump water, so this is something that requires reliability, but it is losing money every year because it's cannibalized by solar. That's the situation of the household that chooses to buy both cars -- that household has to spend a lot more.
Solar has basically made nuclear uneconomical in the U.S. because nuclear has massive fixed costs but almost no variable costs, so it can't exist in a de-regulated market with solar -- the solar just drives it out of business. At the same time, solar is driving greater use of coal because coal plants have the cheapest fixed costs. So Germany was ditching nuclear and using more coal as a result of deploying all the renewables. If you don't pay extra to maintain your reliable capacity, you get blackouts or pay emergency rates to beg for energy from your neighbors (California has to import 20% of its electricity).
Rational actors -- like the household choosing between the two cars who knows they need to drive every day -- are required to plan for sufficient capacity look at this and say "we're not ready to deploy solar at scale" because they want to avoid the blackouts and price spikes. Politicized actors choose a different route, and you get the energy mess that is California, UK, Germany, etc. And all of that is solely because of storage, and it gets worse the more solar you deploy without storage.