To help further support the affected communities please donate to the BVI Community Support Appeal and help us build a better, cleaner, stronger and more sustainable Caribbean region.
Utilities that need to build new power generation facilities or replace old ones are going to have a hard time justifying anything but renewable energy in 2017 and beyond. Investment bank Lazard recently released its 11th analysis of the cost of new electricity generation, titled Lazard’s Levelized Cost Of Energy Analysis–Version 11.0, and showed that wind and solar energy are now cheaper than diesel, nuclear, coal, and in most cases natural gas.
Utilities and regulators are going to be hard-pressed to justify anything but renewable energy generation in the future. From Maine to Hawaii, the U.S.’s energy future is renewable.
The table below shows Lazard’s analysis of the cost, on a per kWh basis, to build new power plants with different fuel sources and technologies. You can see that the lowest cost option is wind at 3 cents per kWh, followed by gas combined cycle that’s as cheap as 4.2 cents per kWh, and solar, which costs between 4.3 cents and 5.3 cents per kWh.
|Energy source||Low-End Estimate||High-End Estimate|
|Crystalline Utility-Scale Solar PV||4.6 cents per kWh||5.3 cents per kWh|
|Thin-Film Utility-Scale Solar PV||4.3 cents per kWh||4.8 cents per kWh|
|Wind||3 cents per kWh||6 cents per kWh|
|Coal||6 cents per kWh||14.3 cents per kWh|
|Natural Gas Combined Cycle||4.2 cents per kWh||7.8 cents per kWh|
|Nuclear||12.2 cents per kWh||18.3 cents per kWh|
|Diesel||19.7 cents per kWh||28.1 cents per kWh|
What you’ll also notice is that the range of costs is much wider for fossil fuels like natural gas. That’s because construction costs can be different depending on the state, fuel prices, and how often the plant is being used. Renewable energy, on the other hand, gets to cut to the front of the line on the grid, meaning nearly 100% of its electricity production is used, allowing for predictable electricity pricing.
What’s clear is that diesel, nuclear, and coal are all higher cost than both wind and solar energy on a per kWh basis. No matter how you slice it, renewable energy is winning versus fossil fuels on economics.
I’ll also point out that there’s no fuel cost risk for renewable energy. The wind and sun are zero-cost fuel sources, unlike extracted fuels, which could conceivably spike from current levels.
It wasn’t long ago that Lazard’s analysis wasn’t so favorable to renewable energy. In 2010, version 4.0 of Lazard’s levelized cost of energy study had wind costs at 6.5-11.0 cents per kWh and solar at 13.4-19.4 cents per kWh. Natural gas, coal, and nuclear all beat solar on a cost basis, and in some cases beat wind.
|Energy source||Low-End Estimate||High-End Estimate|
|Crystalline Utility-Scale Solar PV||13.4 cents per kWh||15.4 cents per kWh|
|Thin-Film Utility-Scale Solar PV||13.4 cents per kWh||18.8 cents per kWh|
|Wind||6.5 cents per kWh||11.0 cents per kWh|
|Coal||6.9 cents per kWh||15.2 cents per kWh|
|Natural Gas Combined Cycle||6.7 cents per kWh||9.6 cents per kWh|
|Nuclear||7.7 cents per kWh||11.4 cents per kWh|
Clearly, the tides have shifted in the energy industry. Fossil fuels is at best flat and in some cases getting more expensive, while renewable energy costs are coming down every year. There’s no indication these trends will reverse course, and investors need to consider whether they’re using renewable energy’s growth as a tailwind for their portfolio or fighting the clear trends in energy. If these charts are any indication, fossil fuels’ days may be numbered.
The Public Service Company of New Mexico is asking for project proposals, including renewables and battery storage, designed to help reach its coal-free goal by 2031.
A joint study by Finland’s Lappeenranta University of Technology and Energy Watch Group presented on the sidelines of the COP23 talks in Bonn demonstrates that a global transition to 100% renewable electricity could be achieved by 2050, and would be more cost effective than the current electricity system.
The study, ‘Global Energy System Based on 100% Renewable Energy – Power Sector’ was presented during the Global Renewable Energy Solutions Showcase event, a sideline to the United Nations Climate Change Conference COP23 currently underway in Bonn.
The study’s key overall finding is that a global shift to 100% renewable electricity is feasible with current technology, and would be more cost effective than the current system led by fossil fuels and nuclear generation.
The study found that in a projected scenario for energy demand in 2050, 100% could be met by current renewable technologies, at a global average LCOE of €52/MWh, compared with 2015’s average LCOE of €70.
In EWG’s 2050 scenario, solar PV covers 69% of electricity demand, wind 18%, hydro 8% and bioenergy 2%. The study predicts that wind will briefly overtake solar in the 2020s, before further price drops put solar back in the lead.
Storage is outlined as the key supporting technology for solar, with around 31% of total demand covered by storage technologies. 95% of this is projected to come from short term storage provided by batteries, with power to gas conversion providing seasonal storage.
“There is no reason to invest one more dollar in fossil or nuclear power production,” exclaims EWG President Hans Josef. “All plans for a further expansion of coal, nuclear, gas and oil have to be ceased. More investments need to be channeled in renewable energies and the necessary infrastructure for storage and grids. Everything else will lead to unnecessary costs and increasing global warming.”
The report is based on an original model developed by Lappeenranta University of Technology, which calculates the most cost-effective mix of technologies based on available resources in 145 regions for a full reference year. The full study is published here.
Only time will tell whether this study’s recommendation will translate into reality. As lead author Christian Breyer sums up: “Energy transition is no longer a question of technical feasibility or economic viability, but of political will.”
BRIDGETOWN, Barbados (CMC) — The Barbados government says independent power producers interested in supplying electricity to the national grid will be able to apply for licences by early next year. Energy Minister Darcy Boyce said that recommendations on licensing systems for these producers should be in hand by the end of the year and that proposals for pricing of renewable energy would also go before the Fair Trading Commission early next year.
“We can give certainty to investors of what they will earn,” he said, adding that the recommendations on pricing will be made after stakeholder consultations.
Boyce was speaking at a signing ceremony between the Division of Energy and Enermax Limited to facilitate the installation of solar photovoltaic systems at 28 community centres and nine polyclinics.
The project, which will be implemented over the next three months, forms part of the Disaster Risk and Energy Access Management (DREAM) Project funded by the Global Environmental Facility (GEF) with project support from the United Nations Development Programme (UNDP).
Its primary objectives are to reduce greenhouse gas emissions through the use of renewable energy and to strengthen Barbados’ disaster risk response by promoting decentralised photovoltaic electricity generation with battery back-up.
Boyce said that eventually he would like to see all community centres, polyclinics, the Queen Elizabeth Hospital and all schools with renewable energy systems.
He said this would result in a reduction in electricity costs, provide critical battery support when there were outages and ensure that communities and schools were not impacted in carrying out their programmes because of high electricity bills.
Prime Minister Andrew Holness says Jamaica must capitalise on the availability of renewable energy. He explained that the country would be in a far better position if it could convert naturally occurring forces into energy.
“It is possible for Jamaica to go to approximately 50 per cent of its energy needs provided by alternatives,” Holness declared during a tour of BMR Jamaica Wind Limited in Potsdam, St Elizabeth, on Wednesday.
BMR Jamaica Wind Limited is the builder, owner and operator of Jamaica’s largest privately funded renewable energy project. The 36.3MW wind-generating facility has been in operation since July 1, 2016. At a cost of US$89.9 million, this represents a major investment in the parish of St Elizabeth.
“From a policy perspective, we would much prefer to have more of our energy locally generated, and from that perspective, renewables are very important to us,” said Holness.
He pointed out that there is great potential between the parishes of Manchester and St Elizabeth for an expansion in wind-generating plants and that the significant investment made by BMR Limited is an indication that there can be even greater investment in wind energy in Jamaica.
Meanwhile, the Prime Minister said that the Government is doing an integrated resource plan which will project what are the country’s future needs. In addition, the plan will incorporate how the country can supply those future needs integrating renewables, in particular wind and solar.
“Of course, the problem with renewables is the intermittency of the supply, and even that can be overcome with battery technology, which has increased and improved, and so I hold a very optimistic view of the future of energy supply in Jamaica. We are now looking at expansion in solar,” added the Prime Minister.
According to Holness, another solar plant will be opened very soon and the Government is also examining waste energy as a solution.
The BMR Jamaica Wind project holds the distinction of being the first project funded in Jamaica by the Overseas Private Investment Company (OPIC). US$62.7 million was provided by OPIC and US$20 million from the International Finance Company (IFC).
The project is the recipient of the OPIC impact award 2016, as well as, the CREF Wind Project of the Year 2017.
Bonn, Germany, 10 Nov 2017 – Leaders from a wide range of sectors came together on Friday at Energy Day at the UN Climate Change Conference in Bonn to announce a new set of initiatives to transition to renewable energy and to show that more ambitious clean energy development can quickly become a bigger part of national climate plans submitted under the Paris Climate Change Agreement.
“With the price of renewable and storage technologies tumbling, and greater understanding on how to set the policy table for a cleaner energy mix and more integrated energy planning, the question before decision makers is, why wait?” said Rachel Kyte, Special Representative of the UN Secretary-General and CEO, Sustainable Energy for All.
Success stories, action and new commitments shared during Energy Day at the COP23 UN Climate Change Conference from businesses, states, cities and forward-thinking countries continue to show ambition to ensure the clean energy transition is not only underway but is irreversible.
“Our pledge to leave no one behind is a critical component of the Paris Agreement. The energy transition that we can see is underway and must be a transition towards energy systems around the world that secure sustainable energy for all,” said Ms Kyte.
“This means placing energy efficiency first, adopting a laser like focus on ending energy poverty and using the renewable energy revolution to achieve universal access and a bending of the emissions curve. With each year, each COP, the health and economic impacts of carbon pollution are better documented and the science of what awaits us, if we continue on our current path, mounts,” she said.
Adnan Z. Amin, International Renewable Energy Agency (IRENA) Director-General said: “Two-thirds of global greenhouse gas emissions stem from energy production and use, which puts the energy sector front and centre of global efforts to combat climate change. Our analysis shows that renewables and energy efficiency can together provide over 90 per cent of the mitigation needed in the energy system by 2050 to achieve the ambitions of the Paris Agreement, while also boosting the economy, creating jobs and improving human health and well-being.”
“We have a large, untapped, and affordable renewable energy potential waiting to be developed. Revising the Nationally Determined Contributions (NDCs) gives countries an opportunity to take a fresh look at how to harvest this potential, not only for mitigation, but in light of the multiple socio-economic benefits of renewables, also for adaptation,” said Mr Amin.
Fatih Birol, International Energy Agency (IEA) Executive Director, said: “The transition of the energy sector in the next decades will be critical to meeting shared climate and sustainable development goals. Widespread action by governments and private sector alike has helped keep global energy-related emissions flat the last three years. Our analysis shows we can meet climate goals while achieving energy access and improving the environment.”
The central goal of the Paris Agreement is to keep the average global temperature rise well below 2 degrees Celsius and as close as possible to 1.5 degrees. About one degree of that rise has already happened, underlining the urgency to progress much further and faster with the global clean energy transformation.
Energy Day is organized by The Climate Group, IEA, IRENA and Sustainable Energy for All (SEforALL) as part of a series of thematic action days held under the auspices of the Marrakech Partnership.
A federal trade panel is recommending that Trump impose tariffs as high as 35 percent on solar power technology.
These range from an immediate 30 percent tariff on all imported solar modules to a four-year quota system that allows the import of up to 8.9 gigawatts of solar cells and modules in the first year.
The ITC made a preliminary finding in September that domestic solar manufacturers had been harmed by cheap imports after a complaint brought by bankrupt Georgia-based producer Suniva Inc in April, says another Reuters article.
“The US solar industry let out a collective sigh of relief” as the ITC’s recommendations were less than half what Suniva Inc requested, says Bloomberg.
Other US solar companies had been bracing for higher duties, which they said would have disrupted the $29bn industry, stifling installations and triggering job cuts.
Trump will make a final decision on the restrictions later this year.
Hurricanes Irma and Maria are still fresh in the mind of all of us who experienced them in the British Virgin Islands and wider Caribbean. These hurricanes have affected so many people, and everyone will have their own heart-breaking, moving and inspiring story to tell. I wanted to highlight a few, and share what I’ve been up to as well.
In the wake of the hurricanes, Virgin Unite has been working with Team Rubicon to bring practical, immediate and vital help to affected communities across the BVI. Lizzy Stileman, a member of Team Rubicon, shares her views about the impact of the hurricanes, and what needs to happen now. Meanwhile, John Ratliff – a long-time friend of Virgin Unite and member of our advisory council for the Virgin Unite Community – shares his story about flying out to the BVI to help on the ground. Below I’ve also shared Sam’s moving film, Help Hope Hurricanes, sharing his view from Virgin Gorda in the aftermath of Hurricane Irma.
Meanwhile, I have been continuing to rally aid and support for the BVI as we continue the recovery process. I recently met with more than 50 representatives of Caribbean governments and utility companies at the Caribbean Renewable Energy Forum in Miami. It was hosted by BMR Energy, one of Virgin Group’s investments, and gave us all a platform to discuss plans to expand the use of renewable energy in the region.
We highlighted the importance of renewable energy – solar, wind, geothermal and others – to reduce costs, reduce the harm being done to the environment and increase the resilience of their electric systems to withstand future hurricanes. In the aftermath of Irma and Maria, this message resonated more than ever.
It was inspiring to see so many decision makers and stakeholders gathered together, committed to tackling climate action now, and putting clean energy as the centerpiece of rebuilding efforts in the Caribbean. There has never been a more important time to push for this type of infrastructure.
Before returning to the BVI, I also travelled to Puerto Rico to meet with governor Ricardo Rosselló. I wanted to meet in person to share my heartfelt thanks for the incredible support Puerto Rico gave to the BVI during Hurricane Irma. We also discussed plans to power Puerto Rico with more clean energy, and the Rocky Mountain Institute plans to complete a study on the most effective ways to do this. It was a really positive visit, testament to the amazing people in Puerto Rico, in such a testing time.
To help further support the affected communities please donate to the BVI Community Support Appeal and help us build a better, cleaner, stronger and more sustainable Caribbean region.
So … that was fast. US natural gas stakeholders barely had time to congratulate themselves for pushing coal out of the power generation market, and it looks like karma is already getting the last laugh. Low-cost renewable energy is beginning to nudge natural gas aside. In the most recent and striking development, California’s massive 262-megawatt Puente gas power plant proposal has been shelved, perhaps permanently.
One key element is consumer pushback. At first glance, the proposal doesn’t seem overly controversial. The proposed plan, a project of NRG Energy, does not involve constructing a new facility. It would have replaced two existing gas units at the company’s existing Mandalay power generation facility in Oxnard, California.
All things being equal, the proposal would provide at least some degree of environmental benefit, because the new units would use 80% less water for cooling than the existing ones.
However, criticism of the new gas project was intense. Penn sums it up: earlier this month, a two-member review committee of the California Energy Commission took the rare step of issuing a statement recommending that the full Commission reject the plans after receiving “hundreds of messages protesting the project as another potential pollution threat to a community already overwhelmed by electricity-generating plants.”
Aside from concerns about local air quality, Penn also cites an LA Times investigation indicating that the state’s energy policy has over-estimated the demand for natural gas power plants, resulting in artificially high rates:
“The commissioners’ recommendation followed Los Angeles Times investigations that showed the state has overbuilt the electricity system, primarily with natural gas plants, and has so much clean energy that it has to shut down some plants while paying other states to take the power California can’t use. The overbuilding has added billions of dollars to ratepayers’ bills in recent years.”
According to Penn, NRG officials maintain that older plant retirements by 2021 make replacement imperative to build up now.
At current costs, local ratepayers won’t get much relief if old power units are replaced with wind or solar.
Land use issues and environmental justice issues also come into play. NRG’s Mandalay power generation facility is located on the beach, and as NRG acknowledges, in 2014 the City of Oxnard enacted a moratorium on coastal development.
That complicates development plans within the power plant site, though NRG emphasizes that the final decision rests with state-level regulators.
Among those objecting to the plant from outside the local community is billionaire investor Tom Steyer, who co-authored an op-ed about the proposed facility raising the environmental justice issue:
“…in our state, not all beaches are created equal. That becomes painfully clear if you drive 50 miles north of Los Angeles to Oxnard, where the beaches have been seized by corporate polluters, marred by industrial waste and devastated by three fossil-fuel power plants that sit along the shoreline.
“Oxnard has more coastal power plants than any other city in the state, and not coincidentally, its population is predominantly Latino and low-income….”
Oxnard residents — and no doubt, real estate developers — are looking forward to transitioning coastal property out of industrial use altogether. Here’s LA Times reporter Dan Weikel on that topic:
“Many residents of this predominantly Latino city with a population of 205,000 say they are fed up with the degradation. Their growing dissatisfaction with the condition of large sections of beach has coalesced into an effort to deindustrialize and restore the shoreline of this city that is framed by Ventura and Camarillo and wraps around the town of Port Hueneme.”
The Puente project has been suspended, not canceled. However, chances of revival are slim. Although the most recent study affirms that renewable energy is a more expensive choice currently, Steyer points out that the redevelopment of Oxnard’s beachfront could be balanced out by new economic activity related to tourism and recreation.
That opens up a whole ‘nother can of worms, as waterfront development typically drives up the cost of housing, squeezing former residents to outer rims with longer commutes and fewer resources.
Sticking to the energy cost issue, the basic problem comes down to local energy vs. long distance transmission.
NRG makes the case that local energy generation is more reliable. That’s a fair assessment as a general principle, as the old model of centralized power plants falls out of favor. Local and on-site generation is becoming a consensus argument among energy experts, regardless of the power source.
On the other hand, the risk involved in transmitting electricity from remote wind farms and solar power plants could be offset by local storage sites, where the growing microgrid movement would come into play.
New tools for financing energy efficiency improvements could also help tamp down local energy demand and ease the way for a more interactive grid that enables consumers to tweak their electricity consumption to help prevent outages.
Cities like Oxnard can also tap into a growing renewable energy knowledge base that leverages local opportunities for renewable energy development and energy efficiency improvements.
Most of all, the Trump administration’s willy-nilly approach to oil and gas development — for example, a new proposal involving drilling along the Pacific coast — raises the stakes for citizens far outside of the communities dealing with local land use issues, leading to a groundswell of support for alternatives.
Petroleum Corporation of Jamaica (PCJ) has got foreign backing for a prefeasibility study on the prospect of setting up another wind farm, but one that would be anchored out at sea.
An American outfit called Keystone Engineering Inc has been invited to do the study, which PCJ Group General Manager Winston Watson indicated should be finalised by around December 2018.
The study for the offshore wind farm is being financed by a grant from the US Trade and Development Agency (USTDA).
“Preliminary work should begin during the final quarter of 2017 and the study is scheduled to last for 12 months,” said Watson. “The results of the study will give an indication of the cost and viability of developing an offshore wind farm for Jamaica,” he told Gleaner Business.
The study is expected to evaluate the viability of installing the wind farm, which would represent one of the first offshore wind installations in Jamaica and the greater Caribbean region.
USTDA links US businesses to export opportunities by funding project-planning activities, pilot projects, and reverse trade missions. The US agency said in a release on the project that the development of the wind farm offers potential export opportunities for a range of American equipment and services related to the design, development, and operation of offshore wind power generation and transmission infrastructure.
Keystone is a Louisiana-based energy firm specialising in the engineering, design, procurement, project management and construction support for offshore wind and oil and gas platforms. The company was the foundation design-engineer for the first offshore wind farm installed in the United States, the 30 MW Block Island Wind Farm off the coast of Rhode Island, USTDA noted.
Watson told Gleaner Business that it was the US agency that approached the PCJ about overseeing the implementation of a grant-funded feasibility study on the prospective offshore wind farm.
He did not indicate the size of the grant, who would develop the facility, nor what the plans were beyond the study.
“At this point it is still too early to comment on the ownership or operational arrangements for any future projects that might be implemented as a result of the study,” the PCJ boss said.
The PCJ currently owns and operates the Wigton wind farm, based at Rose Hill in Manchester. The facility, first established in 2004 and expanded over time, now has generating capacity of nearly 63 MW. Wigton’s total output is now 164,775 MWh per year. It accounts for 6.2 per cent of installed capacity on the national power grid, and 3.7 per cent of Jamaica’s electricity generation
Wigton sells the electricity it generates to the Jamaica Public Service Company, operator of the national grid.
As for the offshore farm, Watson said it was possible the facility could feed both local energy needs and exports.
“It is anticipated that any facilities that may result will provide energy for domestic usage,” he added.
In the USTDA release, Watson was quoted as saying the study would “help the PCJ to get valuable data that can attract overseas investment for the development of our offshore wind resources”.