“A decline in the cost of solar, wind and battery storage means Japan can get 90% of its power from clean electricity by 2035, a study by the Lawrence Berkeley National Laboratory, backed by the U.S. energy department, showed on Wednesday.”
This greeted me a while ago when I opened the “Energy” section of Reuters. For a moment I thought I’d somehow been transported to a parallel reality without noticing. A second later I realised I was indeed transported to a parallel reality where wishes became facts. Unfortunately, the reality I’ve come to call our primary reality, appears to be hellbent on intruding on that much better one.
Wind farm developers demand UK tax breaks to offset rising costs, the FT reported just days before Reuters published the U.S. study about Japan’s possible energy future. If someone is just now beginning to follow the energy headlines the two news reports would certainly seem confusing and with good reason. It’s what happens when the oil of reality seeps into the water of fantasy. And there’s quite a bit of oil seeping.
According to that report, wind farm developers have seen cost increases of between 20% and 30% in the past year — a result of raw material inflation and higher borrowing costs — so now the contracts they won with the UK government for new capacity are beginning to look uneconomical. Without additional financial support, that is.
Amazingly, however, the cost problem appears to be only limited to wind power. Because according to the International Energy Agency, “Despite current higher investment costs due to elevated commodity prices, utility-scale solar PV is the least costly option for new electricity generation in a significant majority of countries worldwide.”
Lazard even puts a figure on that option: according to the bank, utility-scale solar’s lifetime cost, including construction and operation is just $36 per MWh… or rather it was, in 2021, per the FT. That’s unsubsidised. And it compares with $108 for coal, $60 for combined-cycle gas generation, and $38 for wind. So, one might wonder here, why does the solar power industry need subsidies if it’s so cheap to build and operate utility-scale installations?
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