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forbes.com
Clipper yacht Liverpool 2018 passes the Burbo Bank Wind Farm on
August 14, 2017, off Liverpool, England. (Photo by Christopher
Furlong/Getty Images)
Over the last year, the media have published story after story after
story about the declining price of solar panels and wind turbines.
People who read these stories are understandably left with the
impression that the more solar and wind energy we produce, the
lower electricity prices will become.
And yet that’s not what’s happening. In fact, it’s the opposite.
Between 2009 and 2017, the price of solar panels per watt declined
by 75 percent while the price of wind turbines per watt declined by
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50 percent.
EP
One hypothesis might be that while electricity from solar and wind
became cheaper, other energy sources like coal, nuclear, and
natural gas became more expensive, eliminating any savings, and
raising the overall price of electricity.
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The price of nuclear and coal in those place during the same period
was mostly flat.
EP
Evidence for this hypothesis comes from the fact that nuclear
energy leaders Illinois, France, Sweden and South Korea enjoy
some of the cheapest electricity in the world.
But this hypothesis is undermined by the fact that the price of the
main replacement fuels, natural gas and coal, remained low,
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That leaves us with solar and wind as the key suspects behind
higher electricity prices. But why would cheaper solar panels and
wind turbines make electricity more expensive?
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EP
Hirth predicted that the economic value of wind would decline 40%
once it reached 30% of electricity, and that the value of solar would
drop by 50% when it reached 15% of electricity.
In 2017, the share of electricity coming from wind and solar was 53
percent in Denmark, 26 percent in Germany, and 23 percent in
California. Denmark and Germany have the first and second most
expensive electricity in Europe.
“The story of how California’s electric system got to its current state
is a long and gory one,” Bushnell wrote, but “the dominant policy
driver in the electricity sector has unquestionably been a focus on
developing renewable sources of electricity generation.”
The price we pay for the luxury of eating out isn’t just the cost of the
ingredients most of which which, like solar panels and wind
turbines, have declined for decades.
Rather, the price of services like eating out and electricity reflect the
cost not only of a few ingredients but also their preparation and
delivery.
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A good start would be for them to investigate why, if solar and wind
are so cheap, they are making electricity so expensive.
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