The question remains: why, if storage is so cheap and widely available, do Germany, Spain, and Denmark have such severe problems with retail electricity prices?
Reading your article, I see that it cost $50 million to produce one 100MW battery once. No doubt if Musk can keep making these the cost of manufacturing will drop. But he can’t charge his own costs if he wants to expand production – and he would need to ramp up production dramatically to be able to produce on the scale needed to meet grid-level requirements for the industrialized world. From wikipedia (emphasis added):
End users in the United States consumed approximately 3.82 trillion kilowatt hours of electricity in 2017.
The battery in question can meter out at most 100000 kilowatt hours in one hour before it needs to be recharged (probably much less depending on the specific physics of the battery and the inefficiencies involved). (ETA: OK, so this is actually massively complicated. We’re using on average 44 million KWh per hour, so let’s say we only need to account for half of that with these batteries – 220 of them at $11 billion – not as bad as I thought. But we also have to produce the electricity they’re delivering and store it in the first place.) So there’s a huge scalability problem, and the process of scaling up the production of batteries like this is going to contribute massively to the CO2 emissions problem that we’re ostensibly trying to solve.
The “profit on it in less than a year” issue is not exactly clean cut. First of all, it’s unclear how often the power company can sell power off the battery without depleting it. Second of all, the article claims that they “barely had to pay anything at all to generate electricity” – well, yes and no. They had to charge it with the wind farm they’re running, so the costs of generating the electricity really need to be determined by amortizing the costs of running that facility over the course of its lifetime. In other words, the storage and production need to be considered as a single system to determine the real costs and benefits – and this is exactly the point I was making from the outset.
It’s clear that adding a giant $50 million battery to a wind farm doesn’t make the wind farm less expensive – it makes it $50 million more expensive (plus the costs of transporting and installing etc. if that isn’t already factored in). But when the cost of wind-generated electricity is given in the sorts of studies linked by @strangefriendbb they don’t factor in the added costs of storage and/or backup generation that are needed to make them viable. As a result, it’s nearly impossible to get a realistic account of the costs and benefits of any given means of producing electricity.
- It’s provably true that it’s profitable in one particular context, which is in south Australia which has phenomenally high retail electricity prices (highest in the developed world) and problems with delivering reliable service (likely as a result of the high proportions of intermittent wind and solar on the grid there). But see above where I say that it really has to be evaluated as a whole system. The battery isn’t profitable by itself because you have to factor in the cost of producing the stored electricity in the first place, and the linked article doesn’t do that – it handwaves it away. considered as part of a whole system, the battery adds both cost and revenue, and the question of profitability depends on which figure is larger. I think it is likely to reduce retail electricity prices in south Australia if it’s implemented widely enough, but we don’t know yet and only experience will be able to tell us.
- First of all, the retail price of electricity for Germany, Spain, and Denmark is higher than those of other EU countries with presumably similar regulation – I can leave USA out of it entirely and still come to the same conclusion. Second, presumably the regulation in Germany, Spain, and Denmark is friendlier to wind and solar than it is in the US and probably includes more extensive subsidies for those types of generation, which means that if the prices are higher there then either the regulation and subsidies is having the opposite of the intended effect or that it’s having the intended effect of lowering the price of wind and solar, but they are even more expensive than it looks like just going by retail electricity prices.
- Not sure if you’re bringing up nuclear because you think I’m advocating it, but I’m not particularly. But if heavily subsidizing nuclear still leads to cheaper retail prices than heavily subsidizing wind and solar then…maybe it’s actually cheaper than those alternatives? You can argue that it’s costing us more in taxes, but our taxes are lower than those in the EU as well!
Actually, those articles don’t refute my arguments at all. For the first one, the article presents Germany and South Australia as examples of countries where renewable electricity has been able to replace fossil fuel-based generation for a significant portion of demand. What I argued was that everywhere that this happens seems to wind up with extremely high retail electricity prices. Behold:
https://me.me/i/retail-electricity-prices-of-nem-states-including-taxes-compared-to-18203923
Australia as a whole has low electricity prices – because most of Australia gets their electricity from cheap-as-dirt coal generation! South Australia, where 40% is supplied by wind and solar, has the highest retail electricity prices in the world!
The article also talks about studies showing that in computer simulations renewables can supply most of the world’s energy needs. OK, but so far in the real world, everywhere that wind and solar exceed 30% of electricity generation, retail electricity prices go out of control. So these studies by the US National Renewable Energy Laboratory and similar disinterested parties are maybe missing some important details.
The second article is presented in “myth/fact” format which is basically always a red flag for a presentation of info that is dumbed down and simplified to present only one side of a controversial issue. Regardless of that, I’ll take a look when I get a chance – but at a glance it doesn’t seem to have any bearing on the argument that I’m actually making which is again: when large-scale wind and solar are deployed, retail electricity prices go through the roof.
The first article also discusses “smart grids” as a potential partial solution to the intermittency problem. I agree! BUT:
- “Smart grids” are more complex, and therefore more expensive to build
- More complexity usually means more that can go wrong, so ongoing operational costs will be higher as well
So again, it’s possible but the costs of producing that electricity are higher.
Now, I’d really like to believe that all the technology is in place for a glorious renewable energy future. But if I apply even the tiniest bit of skepticism (you know, that magical stuff that makes science and engineering work in the first place?) to the kinds of articles you’re posting, I can see that they’re presenting highly biased, one-sided accounts of the very real engineering, cost, and environmental tradeoffs involved in producing renewable energy. It doesn’t help anyone to ignore the costs and downsides of renewable energy. We have to take a realistic look at the benefits and drawbacks and make sure the benefits make the drawbacks worth it. Articles like the ones you’re posting tend to make that harder rather than easier because they do their damnedest to hide the downsides. Notice that the “reneweconomy.com.au” didn’t even mention the retail price of electricity in South Australia in the discussion of how 1/3rd of their electricity comes from wind. That’s not a balanced, scientific look at the issue.
